Thursday, June 9, 2011

Senate Approves Zero-Based Budgeting Plan

The Massachusetts Senate has approved a Republican-backed initiative requiring the state to move toward a zero-based budgeting process beginning in Fiscal Year 2017.

The Senate adopted the measure during today’s debate on a comprehensive finance reform bill. It drew strong bipartisan support, passing on a unanimous vote of 38-0.

“Zero-based budgeting will transform the way our state spends its resources from an antiquated system based on the past to an innovative system which responds to priorities, requires performance and results, and causes every dollar spent to be justified,” said Senate Minority Leader Bruce Tarr (R-Gloucester), who offered the amendment along with Senators Robert Hedlund (R-Weymouth), Michael Knapik (R-Westfield) and Richard Ross (R-Wrentham).

“The unanimous vote this amendment received shows the innovative approach the Commonwealth is undertaking with respect to the budget process in the future,” said Senator Hedlund. “Formulating a budget that looks at agency spending on a case by case basis rather than previous year spending levels shows the evolution of Massachusetts’ budgeting process and is a move towards a more modern and efficient system.”

Under the Senate proposal, the Governor would be required to file a zero-based budget every four years, starting with the fiscal year that begins on July 1, 2016. Rather than developing a budget that expands on the previous year’s funding levels, the zero-based budget would formulate a spending plan for every state department and state agency without regard to their prior appropriations.

When filing the zero-based budget, the Governor will be required to include a brief description of the tasks and goals for each agency or department, along with a performance benchmark measure. This information will be included in the actual budget document and made available electronically on the official website of the Commonwealth.

“I commend my colleagues for unanimously passing this important amendment,” Senator Knapik said. “Zero-based budgeting will ensure taxpayer dollars are spent in a rational way and will hold state agencies and department accountable for producing results and living within their current means.”

“Zero-based budgeting will give us the opportunity to evaluate items in the budget based on their performance and merit,” said Senator Ross. “In the past we have used previous years’ budgets as the basis for the next year funding without properly evaluating and validating the need for the expense. This creates an important tool that will aid us in forming transparent budgets that will give us confidence, as we support those items that we have built our budget around.”

“Given the Commonwealth’s current economic condition, we need a system which allows policymakers to evaluate spending according to our priorities and our ability to respond to them,” added Senator Steven A. Baddour (D-Methuen), who has co-sponsored zero-based legislation with Senator Tarr in the past. “The Legislature’s current budget process is broken and must be fixed. If we want to permanently solve state government’s tendency to overspend, we need to fundamentally reform the budget process. The use of a zero-based budget will force us to prioritize spending and substantively review all state-sponsored programs. I believe that this type of reform will help restore taxpayer confidence in state government spending.”

The bill now heads to the House of Representatives for further action.