The House and Senate gave final approval Wednesday to Senate Bill 181 (Mensch-R- Montgomery) establishing a Performance-Based Budget Board and requiring agencies under the Governor’s jurisdiction to justify their budget requests for all existing and proposed programs.

The legislation does not cover the expenditures of the General Assembly ($365.1 million) or the Judiciary ($355.5 million) for a total of $720.6 million of the General Fund budget.

The Secretary of the Budget is required to establish a schedule of performance-based reviews to ensure agencies are reviewed at least once every 5 years.  The General Assembly may direct an agency to undergo a review by concurrent resolution.

Agencies undergoing review will prepare a performance-based budget plan that gives a detailed description of all agency line item appropriations and programs and describes performance measures and objectives.

The plans are then submitted to the Independent Fiscal Office, the Secretary of the Budget and the Chairs of the Senate and House Appropriations Committees.

The IFO is then directed to evaluate each plan and to develop performance measures for each agency program or line item appropriation that include outcome-based measures, efficiency measures, activity cost analysis and other indicators.

The plans and the IFO’s review are then submitted to the Performance-Based Budget Board to review the performance-based budget plans of state agencies and make recommendations on how each agency’s programs may be made more transparent, effective, and efficient.

The Budget Board is made up of the Majority and Minority Chairs of the House and Senate Appropriations Committees and the Governor’s Budget Secretary.

The agency budget plans approved by the Board are to be “considered” by the Governor and the General Assembly in developing the Commonwealth’s annual budget.

The Secretary of the Budget and the Independent Fiscal Office is also directed to do a review of state tax credit programs.

A House Fiscal Note and summary is available.

The bill now goes to the Governor for his action.

[Posted: Oct. 25, 2017]

10/30/2017