By Jason Mercier

It's only June but this week felt a bit like session with many budget related activities occurring. First the Office of Financial Management (OFM) sent agencies instructions for the coming 2017-19 budget. Then there was the June Revenue Forecast yesterday showing a $308 million increase in projected revenue. Finally, today I met with several officials from the City of Meridian, Idaho who are on a field trip to learn about the Priorities of Government (POG) budget process initiated by Governor Locke in 2002. 

Based on OFM's 2017-19 budget instructions, it sounds like there may be an opportunity for the Legislature to breathe new life into the state's POG process. According to the June 10 memo OFM is asking agencies these budget questions:

• What strategies and activities will be most effective in achieving agency and statewide goals and priorities? 
   
• Given financial or other constraints, how can we maximize the outcomes of our highest priority services and activities? 
   
• How else can the state meet desired outcomes in a more cost-effective manner?

These budget instructions remind me of what Governor Gregoire asked agencies in 2010 for her POG 2.0 effort. From her press release:  

Fiscal responsibility
1. Is the activity an essential service? 

2. Does state government have to perform the activity, or can it be provided by others? 

3. Can the activity be eliminated or delayed in recessionary times? 

4. Does the activity need to be paid for with state general funds? Should users pay a portion of the costs? 

5. Are there federal funds or other fund sources available to support this activity? 

Efficiency
6. Are there more cost-effective, efficient ways to do the activity? 

Performance
7. Can the activity be the subject of a performance contract? 

8. Can the activity be the subject of a performance incentive? 

I told the City of Meridian officials the natural next step in the Priorities of Government (POG) budgeting process is to identify measurable performance outcomes for those programs funded in the budget. By having detailed performance information, better prioritization can occur by funding those strategies that deliver the best results. To help build a baseline for future spending decisions, the budget adopted should identify at least one high-level performance outcome per activity purchased.

This will allow the budget to be transformed from a spending document to a performance-based purchase agreement between government and taxpayers. For an example of how this would look in practice consider the Texas budget. 

It is important to remember that if POG is truly being used to build the budget any proposed tax increases will be directed at purchasing activities that are at the bottom of the state’s buy list, not the top. This means under a POG budget any tax increases will be for those lower priorities that didn't make the initial cut within available revenue.

Let's hope the current budget debate will give prioritized performance-based budgeting new life during the 2017 session.