A smart idea to end “zombie-based budgeting”

Properly done, budgeting is about setting priorities. You decide what is most important, then do your best to wisely spend your available resources in a way that advances those priorities.

The usual approach in both government and private organizations, though, is to take last year’s budget and just add on to it. Rather than evaluate what you’re already spending your money on and whether or not it’s effective, you just carry the old budget forward and go from there.

You could call it “zombie-based budgeting” – it doesn’t require a lot of thought but mindlessly eats up scarce resources.

In the last few years, we’ve seen a big push in Olympia to more rigorously evaluate tax preferences. Legislators have rightly wondered if the incentives – which run the gamut from the 2013 Boeing package involving billions of dollars to niche industry incentives worth hardly anything – are effective. Are they keeping jobs in Washington, or attracting new ones? Are they helping industries compete with businesses in other states?

Thanks to some legislators who took the lead, the state now evaluates tax preferences in a smarter way. The Legislature sets a goal or intent for a preference and gives it a “sunset date” when the incentive ends. Those end dates are a chance for legislators to evaluate the incentive’s performance and debate whether or not it should be extended.

Andy Hill asks, shouldn’t we do the same thing with state-funded programs?

Senate budget writer Andy Hill (R-45) took inspiration from the state’s new approach to tax incentives. Now he’s out with a smart bill (the State Money Accountability, Review, or Termination Act) that takes the same rigorous approach to state-funded programs.

We all know that when government starts a new program, odds are it will continue for a long time. Sometimes a program continues in perpetuity for no better reason than the fact that it existed last year, and the year before.

As Hill put it in his briefing on the bill:

The truth is that many state programs continue with no end and with no examination of what each has achieved…This creates a situation with spending programs just like we have with tax exemptions: we have hundreds of programs on the books without any clear statements of intent or any metrics to determine whether or not they are working.

Hill’s approach would give state-funded programs specific goals and metrics by which they could be evaluated, and sunset dates so that those evaluations and discussions are sure to occur. When a program hits its 10-year sunset, the Joint Legislative Audit & Review Committee would review whether the program is reaching its goals and recommend if the program should continue, be changed, or perhaps ended.

Hill thinks most programs will reach their goals, and that “the ones that will have trouble are likely the ones that need review the most. There is no reason why we should continue adding or funding programs without an answer to the question, ‘Have they done what they are supposed to do?’”

It’s tough to disagree with that, which is why Hill’s proposal has already passed the Senate on a bipartisan 40-9 vote. Let’s hope the House sees the wisdom in that approach, too.

-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.