Senators Scott Wagner (R-York), Scott Martin (R-Lancaster), Mike Folmer (R-Lebanon), Guy Reschenthaler (R-Allegheny), Mike Regan (R-Cumberland), and Dan Laughlin (R-Erie) announced Monday they intend to introduce a zero-based budget reform bill that would require every state agency to build its budget from a starting point of zero dollars.

Known as zero-based budgeting, the bill will require state agencies to justify every dollar of spending. These reform-minded senators believe this budgeting method will find unrealized savings and efficiencies that can save taxpayers millions of dollars.

“Instead of doing the heavy lifting of finding savings and managing state agencies, Governor Wolf wants to raise taxes on hardworking Pennsylvanians,” Sen. Wagner said. “If we implement zero-based budgeting, state government can be responsible stewards of taxpayer money. We could balance our budget and start cutting waste.”

This bill would be a significant departure from traditional budgeting, whereby agencies base their projections on the prior year’s figures. Under the proposed budgeting process, state agencies would be required to submit:

-- The statutory legal justification for the agency and each activity within the agency.

-- An itemized account of expenditures required for the agency to operate at the minimum level of service required by statute.

-- An itemized account of expenditures required for the agency to operate at the current level of service.

-- Concise statements about the quantity and quality of services provided at both the current and minimum levels.

“We owe it to taxpayers to ensure every dollar they send to Harrisburg is used wisely and efficiently,” Sen. Martin said. “Every public policy decision should be driven by what is best for the citizens and the taxpayers of Pennsylvania, and not by what a department or agency spent in the previous year.”

“The current budgeting system perpetuates bureaucracies and rewards inefficiency in government operations. Zero-based budgeting would ensure that state money is invested in programs that are necessary and would reward those agencies that operate efficiently. Currently, agencies are working under the philosophy that, ‘If we don’t spend the money by the end of the year we, we won’t get it next year.’ Zero-based budgeting specifically targets that problematic way of thinking,” Sen. Laughlin said.

Zero-based budgeting offers real accountability in state government, which is something the sponsors say is needed in Harrisburg. The state’s credit has been downgraded twice in the last three years, putting Pennsylvania in the bottom five states in Standard & Poor’s ratings.

“We need to change the way we think about budgeting in Pennsylvania to better protect our taxpayers from these recurring ‘budget crises,’” Sen. Reschenthaler stated. “Zero-based budgeting will use a more fiscally responsible, commonsense approach to budgeting. I look forward to working with my colleagues to better protect taxpayers’ hard-earned dollars in the Commonwealth.”

“Every day, families and businesses have to live within their means, and they do it by questioning every dollar they spend,” Sen. Folmer said. “Government should do the same through zero-based budgeting that questions every expenditure before it’s made.”

“Adopting common sense zero-based budgeting practices will restore transparency and accountability in government spending,” Sen. Regan noted. “This tested and proven private-sector approach will empower the legislature to identify cost-reduction opportunities; scale back or eliminate obsolete programs; and redirect funding to services and programs where additional resources will enhance outcomes.”

The private sector is adopting zero-based budgeting today with Kraft-Heinz, Coca-Cola, Kellogg’s and Unilever using this method to ensure they are operating in the most cost-effective manner.

“The scariest phrase in Harrisburg is: we’ve always done it this way. We’re trying to change that,” Sen. Wagner said.

Performance-Based Budgeting

In October the General Assembly passed and the Governor signed into law a performance-based budgeting bill-- Senate Bill 181 (Mensch-R-Montgomery)-- that covers much the same ground.

It requires agencies under the Governor’s jurisdiction to justify their budget requests for all existing and proposed programs and have those justifications reviewed by a new Budget Board and the Independent Fiscal Office.

The performance-based budgeting bill does not cover $720.6 million in expenditures by the General Assembly or the Judiciary.  Click Here a more complete summary.

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[Posted: Nov. 27, 2017]

12/4/2017