As a CPA and business owner for the past 30 years, I’ve spent a significant amount of my career developing and working with budgets. I was shocked when I first saw the process used by state government. Previous spending is rarely analyzed. It’s generally assumed all previous spending is good spending, which leads to the next assumption that there will be an increase in spending. When state agencies submit their budgets, it begins with what they plan to spend more money on.
Government should manage money like a family does by sitting around a table, looking at the budget, and getting rid of bad spending. For instance, the innovation of cell phones has made landlines increasingly obsolete. Or, why would you keep buying diapers and formula if you no longer have a baby? If I hired someone to fix my plumbing and the plumbing doesn’t work, I wouldn’t have that plumber keep coming back. The process is technically known as zero-based budgeting, but it really comes down to how normal people deal with spending.
It’s time that state government is held accountable to manage the state budget like the rest of us do and implement a zero-based budgeting process. If we are going to spend money on a program, we should know first what that program should be accomplishing (performance metrics). We should then analyze if that program accomplished its goal. If it didn’t, we take one of two steps: revise how we do it so that we accomplish the original goal, or just end the program. While the phrase “end a program” doesn’t yet exist in state government, it’s long overdue in stewarding an $89,000,000,000.00+ budget. We can eliminate massive waste by simply asking people to look at program effectiveness and react to what they find in a way that a normal family would.
I’ve learned that a major hurdle to implementing change is navigating the complexities of fixed state government structures and processes. Having the right people with the right experience ready to execute best practices like performance metrics and zero-based budgeting is paramount to bringing long-overdue reform.