The Old Budget Game Cost- Based Budgeting Starting PointLast
Year = BASE costs FocusAdd/ Subtract costs re: BASE Addition
Autopilot increases = new BASE Plus needs SubtractionCut from new
BASE Submission Justification for needs/costs -- plus a little
extra
Slide 3
The Old Game (contd) IncentivesBuild up costs - make cuts hard
Analysts jobFind hidden/ unnecessary costs Electeds jobChoose to
cut services, OR Raise taxes to cover costs GET BLAMED! Focus of
debateWhat to cut What to tax What drives decisions? Avoiding pain
before next election
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In with the New Funding for all state agencies, boards and
commissions will be kept, cut or eliminated based on their capacity
to deliver measurable results. No more automatic funding.
Slide 5
Spending Reform Laws BUDGETING FOR RESULTS Senate Bill 3660
Requires agencies to establish outcomes and performance based
measurements; multi- year revenue forecasts Senate Bill 3708
Taxpayers get access to quarterly budget Statements: Actual vs.
Budgeted Results House Bill 5424 Mandates realistic revenue number
in establishing state budget ; deduct fixed costs
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RESULTS You can spend my money on programs, I just want to see
efficiency and I want to see results. ---Rich, 80
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Budgeting for Results Asks Four Basic Questions How much
revenue will we have? What outcomes matter most to our citizens?
How much should we spend to achieve each outcome? How can we BEST
deliver each outcome that citizens expect?
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1. Decide How Much to Spend Governor Quinn introduced his
budget. His budget for FY 12 projected to spend $35.98 billion in
General Revenue. The following slide is a pie chart breakdown of
that budget as introduced.
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How Much to Spend? ButBudgeting for Results asks the question:
How much money do we have to spend at the time of the budget as
introduced? This year, the Senate estimated $34,282 billion; The
House estimated $33,173.5 billion. It was historic because the
budget process typically starts with costs, not with revenue.
Slide 11
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Slide 14
Summary of State of Illinois Spending FY 05- FY 12 (In
Billions)
Slide 15
2. Set the Priorities of Government: The Results Citizens
Desire Ask citizens: Door to Door Surveys Focus groups Internet
surveys We have set up a commission. This input creates legitimacy
for the process. Through this input, legislators and leaders make
final decision.
Slide 16
IL Priorities of Government Results Providing a quality
education and opportunities for growth. Growing the jobs of today
while working to create the global industries of tomorrow.
Protecting businesses and residents from crime, catastrophe and
wrongdoing. Protecting our children, veterans, poor, disabled,
elderly and sick. Making government more efficient and effective.
Maintaining our cultural and natural resources.
Slide 17
3. Pricing the Priorities How Much Should You Spend on Each?
How much are they each worth? Not how much do they cost? BFR
Commission makes recommendations, can be adjusted later in the
process--serves to create a finite pot of money for each outcome
goal. Last year, the House and Senate differed in their approach to
adopting revenue and making appropriations.
Slide 18
IL Priorities of Government Results Providing a quality
education and opportunities for growth. Growing the jobs of today
while working to create the global industries of tomorrow.
Protecting businesses and residents from crime, catastrophe and
wrongdoing. Protecting our children, veterans, poor, disabled,
elderly and sick. Making government more efficient and effective.
Maintaining our cultural and natural resources.
Slide 19
Jobs Note: General Revenue Fund Budget does not include $13
billion in bonded capital projects that are distributed and
overseen through DCEO, IDOT and Capital Development Board.
Slide 20
4. Monitor Performance and Evaluate Outcomes Budget Director
David Vaught sends letter to agency directors requiring answers to
these questions: Which prioritized budget outcome will your agency
meet? How will you achieve your desired outcomes? How much will
your agency services costGRF, OSF and Federal Funds? How will your
measure results? And what achievement targets can you commit
to?
Slide 21
Appropriations Committee Every state agency received a letter
from the Appropriations Chairs asking: What are the outcomes your
agency is attempting to achieve? What are the measurable results of
these outcomes? What is the value of the outcomes? What outcomes
have been achieved in the past? How does the agency plan to improve
the value of services it provides?
Slide 22
Example: IL Human Services Division of Human Capital Outcomes:
Assist families in attaining economic stability. Improve health and
alleviate food insecurity. Provide shelter and prevent
homelessness. Assist working families by providing quality child
care. Facilitate immigrant integration and attained
citizenship.
Slide 23
IL Human Services Division of Human Capital Performance
Measures (historical): 46% of homeless adults and children were
placed in permanent of transitional housing upon leaving the
shelter. 72% of persons leaving supportive housing attained
independent living. 88% of all households that received homeless
prevention assistance maintained their housing.
Slide 24
IL Human Services Division of Human Capital Value: 2.5 billion
in benefits to families (temporary assistance) generated $4.6
billion in economic activity. $1 million prevents homelessness in
2,500 households. Every $1 dollar invested in child case saves
taxpayers $13 in future costs.
Slide 25
Strategies Focus on homeless prevention: reduces demand for
other servicescrisis intervention, relocation assistance, etc.
Focus on supportive housing for formerly homeless persons: results
in decreases in in- patient psychiatric care, county jail
interactions, uncompensated hospital care. Focus on increasing the
number of children cared for in a licensed setting: leads to fewer
children in special education, fewer welfare payments.
Slide 26
Performance Based Funding What matters most? Requests for
Results take the place of Budget Instructions. A specific level of
performance at a specific price. Proposed measures of performance
No guarantee of funding based on historic levels. Opportunities for
departments to propose new, innovative practices.
Slide 27
Innovative Offers: Examples Iowa: Reinvented the Corrections
Department, to drive down recidivism Washington State: Moved $45
million from ER care to drug and alcohol treatment under Medicaid
Illinois is working on unified budgeting in the area of long-term
care for seniors and the developmentally disabled.
Slide 28
The Bottom Line Focus on the keeps, not just the cuts Buy
results, not costs Low-value spending is forced out of the budget
Important new investments go to the front of the queue General
interest trumps special interests Performance accountability
Continuous reform/improvement Common Sense communications