House Bill 10-1119: Concerning the process by which the state annually allocates moneys for its budget – State Measurements for Accountable, Responsive and Transparent (SMART) Government Act (Senate version)

House Bill 10-1119: Concerning the process
by which the state annually allocates moneys for its budget

(State Measurements for Accountable, Responsive and Transparent
(SMART) Government Act)

Rich Jones
Director of policy and research, The Bell Policy Center

April 13, 2010

Thank you for the opportunity to provide written testimony in support of HB10-1119.

The Bell Policy Center is a non-partisan, non-profit research and advocacy organization dedicated to making Colorado a state of opportunity for all. We have worked on state fiscal issues for nearly a decade because we know having an effective public-sector partner is essential to building the state of opportunity we envision.

We also believe in fact-based decision making and that policymakers are most effective when they have a solid understanding of how programs operate, what they are accomplishing and how they compare with one other.

Finally, it is equally if not more important that the public is aware of public programs, what they are intended to do and whether they are performing as expected. Providing understandable, reliable and easily accessible information to the public so they can draw their own conclusions about government operations is critical to ensuring public involvement and support for state government.

The Bell Policy Center supports HB 10-1119 to create a performance budgeting process for Colorado.

There was a great deal of discussion this summer during the meetings of the Long Term Fiscal Stability Commission about the need to determine what Coloradans want from state government and the need to better measure and report on the outcomes associated with public spending. Providing policymakers and the public with better information on where state government spends its funds, the goals for specific programs and how effective these programs are at meeting them helps make state government more transparent and accountable.

This legislation will formalize a process to ensure consistent and comprehensive review of program performance. It requires that the principal departments of state government present to the legislature a strategic plan, performance-based goals, performance measures and outcomes related to these goals.

The legislation also encourages departments to determine whether programs and services assist in achieving a number of other important outcomes, including reducing child and family poverty, increasing educational opportunities, expanding the workforce with quality jobs, addressing work-support issues and establishing fair and targeted tax policies.

The standing committees of the General Assembly will hold hearings on department plans and measures that will provide an opportunity for public testimony. Based on these hearings, the committees of reference can submit recommendations to departments on strategic plans, performance-based goals and performance measures. This will help expand legislative oversight of the programs and operations of state departments and provide an opportunity for greater public input into setting priorities and goals.

It also directs the state auditor to conduct performance audits of programs in at least two departments each year so that all departments are subjected to an audit in a nine-year cycle. The auditor is directed to review the integrity of the performance measures, the accuracy and validity of reported results and the cost effectiveness of audited programs and services in achieving the department's performance-based goals. All of this information is critical for policymakers to consider when making both policy and budgetary decisions.

The committees of reference can submit priorities for each department to the Joint Budget Committee and hold joint hearings with the Joint Budget Committee to present recommendations for each department. Again, this process expands the number of legislative committees actively involved in overseeing department operations and offering funding recommendations.

Finally, the Office of State Planning and Budgeting will publish an annual performance report summarizing each agency's strategic plan that will be posted on the state's website and distributed to members of the General Assembly. This will help make state government operations more transparent to the general public and provide an easily accessible source for performance data. The bill also directs the Office of Information Technology to conduct a feasibility study to determine the cost of building an electronic budgeting system and set out the parameters for such a system.

These processes and activities are similar to those used by other state legislatures that have successfully implemented performance-based budgeting. However, it must be pointed out that the road is littered with failed attempts to increase the use of program and performance data in state budgeting decisions. At times the processes can be cumbersome, and it is hard to define program goals and develop effective performance measures. Nonetheless, we think it is important to embark on this journey and understand that the process will not be perfect but can be adjusted over time to make it more effective.