Let me start by stating the obvious: Our state’s budget process is broken. We live in a time of perpetual fiscal stress, and have been unable to deal with structural issues that face the state. Our existing budget framework is just not up to the job. We need to scrap our balkanized budget process and adopt a new approach that sets top policy goals and funds them within available revenues.
The current process is structured around deliverables of individual executive branch agencies rather than achieving broad strategic policy outcomes. The legislative branch is similarly structured with committees that mirror the balkanized executive branch agencies, further promoting a line-item rather than an outcomes-based approach. We end up concentrating on the cuts necessary to balance the budget rather than the keeps that achieve our priority outcomes.
Our political leaders are frustrated and want change, but longstanding institutional processes discourage innovation and reward the status quo. When we argue about what to cut, rather than asking what we should fund, we are concentrating on only a small percentage of the budget. Rather than setting state priorities and funding them; we ignore the big picture and spend months quibbling about details.
We can’t go on like this any longer. We need to shift the paradigm, as they say, and use disruptive innovations to stand the current process on its head.
More than a decade ago, David Osborne and Peter Hutchison wrote The Price Of Government to address the pernicious perpetual fiscal crisis that exists in political jurisdictions across the country. They outline structural recommendations that could revolutionize how we manage public resources.
Connecticut may be the Land of Steady Habits, but we really don’t have anything to lose by trying something different. We need to embrace this approach and fundamentally change the budget debate. We should, as Osborne and Hutchison explain, “shift the focus from spending cuts and tax increases to helping… [Connecticut] buy the best possible results for citizens with what remains.”
Here’s the blueprint:
- Set the price of government at available revenues.
- Determine top ten priorities and allocate the available revenues to the priorities.
- Create a guidance team of executive branch, legislative branch and outside experts to guide the process. Ensure, preferably through legislation, that process outcomes are adopted by existing government organizations. With the assistance of expert technical staff, start by creating a rough allocation of the revenues to the top priorities.
- Create results teams for each of the ten priorities. Each team will have access to the Office of Policy and Management and outside analysts, and will be asked to determine where to put the money to get the best results.
Connecticut is notorious for creating task forces to address critical issues, and more often than not their recommendations do not reach the budget. Instead, let’s put top experts on these results teams, along with representatives of the executive and legislative branches, knowing that their recommendations will then be reflected in the budget.
- Adopt strategic program area reviews for each of the top ten areas by reviewing two strategic areas each year.
- Reorganize the appropriations subcommittees around the top ten priorities, rather than individual agencies.
- Bring the reports of the ten teams together to form the budget outline.
This process has been successfully used in Washington state, and despite tough news on programs that needed to be cut, was well received. “I’ve never been to a set of hearings where the reception was so positive despite the amount of bad news we had to deliver,” observed the legislature’s finance director. That’s because people respect policy makers who bite the bullet and address the problem rather than kick the can down the road, regardless of how bad the news.
Some of the changes will take time, but we can – and should — begin now by setting our top ten priorities and building our next budget based on them. The goal is to create a policy-driven budget by the beginning of the next legislative session in 2018. InformCT is prepared to guide this process, with the help of willing government and private sector leaders.
Let’s get started!
Robert W. Santy is President & CEO of the Connecticut Economic Resource Center Inc. and Chair & CEO of InformCT, a public-private partnership with a mission of providing independent, non-partisan research and analysis in Connecticut. Adapted from remarks delivered at the Connecticut Data Conference in New Haven on June 23.