Budget Reform with Performance Based Budgeting

January 24th, 2012

With the beginning of the legislative session and change in executive leadership, there has been renewed talk of state budget reform. Budget reform is necessary to improve the transparency of the process and to increase budget accountability.

One proposed reform includes Performance Based Budgeting. Performance Based Budgeting reforms aim to use data about the effectiveness of programs to inform budget decisions. Performance Based Budgeting can accomplish some of these goals. Budgeting is complicated, however, and any reform should be made with care.
In this three-part blog series on Performance Based Budgeting, we will delve into those issues. In part one we will go over a few basics about Performance Based Budgeting.

Performance Based Budget reforms seek to collect and evaluate performance data on programs and use that data to inform funding decisions. There are a wide range of budget reforms that can fall under a performance based budgeting system.

According to the National Association of State Budget Officers, twenty five states use some kind of performance budgeting. Mississippi currently collects some performance information that is reported by state agencies to the Joint Legislative Budget Committee annually on their agency budget request.

Last year, the State Senate passed the Mississippi Smart Budget Act (SB 2301) that would have implemented some performance based budgeting reforms. However, the bill was not passed in the House. It is likely that a similar bill will be introduced during this legislative session.

The next blog post in this series will explore some challenges to the implementation of effective Performance Based Budgeting and some concepts/questions that should be considered if it is to be implemented in a constructive manner.

Read my opinion piece on this in the Hattiesburg American.

Budget Reform with Performance Based Budgeting, Part Two