November 7, 2011
The State of Illinois’ new commission tasked with improving the State’s budget process recently published its first annual report with substantive recommendations for implementation of performance based budgeting for the State and guidance for the next steps in the process.
The Budgeting for Results Commission was appointed by Governor Pat Quinn in August 2011 and has spent the last several months studying the state budget and taking testimony from budget experts, agency directors and members of the public. The panel’s report includes 22 recommendations to improve the State of Illinois’ annual budget process. As previously discussed here, Budgeting for Results is an effort to move away from automatic funding renewal for programs each year in favor of a process focused on desired results from government spending and funding programs based on their effectiveness in reaching those outcomes.
The Commission is required under the budgeting for results statute to file a report each year by November 1 with recommendations for the following year’s budget. The law tasks the Commission with proposing recommendations to the Governor regarding the appropriate outcomes and goals to be funded in the following year’s budget. It also requires the Commission to propose the allocation of the total budget that should go toward each of the results and to consider mandated expenditures that might be eliminated in the budget.
In its report the Budgeting for Results Commission proposed that the FY2013 budget focus on funding the following seven results:
- Government Services: Illinois state government operates efficiently, effectively and transparently.
- Education: Illinois has a quality education system that provides equal opportunity for growth for all Illinois students.
- Economic Development: Illinois’ economy provides sufficient opportunities for residents to achieve economic well-being.
- Public Safety: Illinois has adequate public safety mechanisms and infrastructure in place to protect the lives, safety and property of residents.
- Healthcare: All Illinois residents have access to quality affordable health care.
- Human Services: Illinois assures that all residents, but particularly children, the elderly and disabled, are able to experience a quality life.
- Quality of Life: Illinois maintains the quality of cultural and environmental resources for Illinois residents and visitors.
These desired results established in the report were very similar to the budget priorities set out in the Governor’s FY2012 recommended budget with the addition of the fifth result regarding access to quality health care. Although numbered, the desired results were not presented in a prioritized order.
The report explained that in order for the Budgeting for Results process to be successful goals and sub-goals need to be assigned to each result. These more specific objectives would then be the basis for establishing metrics to measure achievement of the results.
Despite the importance of the goals and sub-goals to the success of the process, the Commission ultimately determined that it could not officially publish these standards in its first report. Instead it provided a sample of goals and sub-goals drafted during the process and reserved the right to add them to the report later in the year.
For example, the following draft goals and sub-goals were presented for the government services result:
Result 1: Government Services
- State agencies and policy-makers are able to make effective decisions and monitor processes effectively for accountability and the public welfare
- Improve the ability of Illinois’ IT infrastructure to collect and analyze data essential for decision-making and accountability
- Improve access to information through technology
- State functions are conducted with financial efficiency
- Improve State purchasing activities to reduce administrative costs and maximize cost-savings
- Assure human resources functions are managed efficiently and effectively
- Maintain the most effective balance of state employees and/or facilities and subcontracted service providers and functions
- State maximizes tax, fee and other revenues to which it is entitled
- Improve the effectiveness of revenue collection processes
- Utilize funding efficiently to produce outcomes
The Commission’s report also found that it was premature to propose actual funding allocation to each of its determined results “until better performance data about state spending and programs is collected and analyzed.”
Many of the recommendations the Commission included were not specific to the Budgeting for Results process but suggest general areas of reform in the State’s annual budget process. The report suggested a common set of revenue estimates should be agreed on for both chambers of the General Assembly prior to the appropriations process. It also called for the estimate to be built off the requirement that the Governor present a balanced budget based on only currently enacted resources. It recommended that annual appropriations account for fully funding projected Medicaid costs rather than delaying Medicaid payments into future years in order to spend more in other areas.
Although the Commission reviewed a list of more than 1,700 mandated expenditures provided through a survey of State agency directors, it did not recommend elimination of any specific mandates. Instead the Commission plans to form a subcommittee to study mandates and interact with State agencies and outside groups to further deliberate on the topic. In its discussion of mandates, the report did address legislatively required transfers and recommended that some of the items that are currently automatically funded be reviewed for history, intent and effectiveness of the spending as part of the overall appropriations process. This recommendation excluded local revenue sharing, debt service transfers, revolving funds and cash flow transfers.
The full report of the Commission is available on the Budgeting For Results website along with the background materials and minutes from the group’s meetings.