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Baseline Budget Better Than Base-Bloated Budget

This is a good development.

The “Present Law” budget that is the normal starting point for building a new biennial budget is basically the previous one plus an inflation factor plus a case load factor, plus any changes that were required during the biennium plus…, well you get the idea. The result is that it guarantees the starting point for a new budget is larger than the old one, and any reductions in that budget are treated as cuts, even though the actual spending amount is probably more than last year’s. That’s just dishonest.

The feds do the same thing. They budget a billion dollars for a program to search for green cheese on the moon and then ‘cut’ that program and claim a billion dollars in savings even though it had never been spent before and nobody ever really intended it to be spent in the future. It’s purely political gamesmanship meant to allow politicians to claim they cut spending when in reality they probably raised it.

So…when someone says they’re making a cut to the budget be sure to ask them if they’re cutting hypothetical spending or if they’re actually cutting spending, i.e. will this year’s spending be less than last year’s. And then watch as they take out their hanky and explain how complicated the whole process is and that you should just take their word at face value.

Even baseline budgeting doesn’t solve the problem of waste, though. It assumes, for example, that every nickel spent last year was both efficiently and effectively expended. That’s not necessarily the case. The real answer is performance-based budgeting, which allocates dollars based on a program’s demonstrated ability to achieve agreed-upon government missions and functions, and then prioritizes available dollars to get the biggest bang for the buck. In short, it’s how you and I allocate our spending every day. You can read a lot more about it, along with a pension system primer and tax analysis in our new Budgeting For Results study.

Montana Policy Institute Website Seeks Tips on Government Waste

October 3, 2008

FOR IMMEDIATE RELEASE

 

Bozeman, Montana–Citizens can now report government waste, fraud, and abuse at the new Montana Policy Institute website, www.montanapolicy.org.

The Montana Policy Institute, based in Bozeman, is a member-based 501c(3) nonprofit organization dedicated to making state and local governments more accountable to the people they serve.

All citizen tips will be researched by the MPI staff, which now includes an investigative journalist.

In addition to tracking government waste, fraud, and abuse, MPI is also advocating policies to promote the liberty, prosperity, and quality of life for all Montanans by increasing government transparency and accountability. These policies would result in significant tax and spending reform, as well as provide Montanans with the ability to see where their tax dollars go and what’s being done by their government in their name.

MPI’s tax reform proposals would stop the systematic ratcheting up of spending and the growing role of government spending in the state’s economy by placing reasonable limits on spending growth. It would also build reserves during strong economic times and draw on those reserves when the economy slows and revenues decline. Excess revenues would then be returned to taxpayers in the form of rebates or permanent tax relief. Studies show that Montanans would have had over $3 billion dollars returned to them over the past 15 years under a system like the one MPI is proposing.

MPI’s Montana Transparency Project would have the state place all state and local spending on a fully searchable, downloadable, web-enabled database. Citizens and legislators could see exactly where budgeted money is spent for every department, every county, locality and school board. Government entities could easily justify funding requests based on their open, transparent, and demonstrated budgetary requirements. Contractors could see who won bids and why. Citizens could see where their hard earned tax dollars end up.

And MPI’s Objectives Based Budgeting proposals would provide a means for legislators to objectively measure Agency and Department performance in light of mutually agreed upon goals, and then to allocate tax dollars according to citizens’ needs and agencies’ performance. This would reduce or eliminate duplicative and wasteful spending, and ensure that Montanans’ hard earned money is spent on priorities rather than legacies.

MPI is Montana’s premier resource for free market, individual liberty educational and informational products. Citizens can also join MPI and donate to these projects at the website, www.montanapolicy.org.

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Contact:

Carl Graham, CEO, Montana Policy Institute: 406.600.1139

John Q. Murray, Investigative Reporter: 406.721.1129, johnqmurray@gmail.com

Montana Policy Institute, 1627 W. Main St #354, Bozeman, MT 59715