Kitzhaber's 10-Year Budget

Governor Kitzhaber is tackling another intractable state problem — making spending decisions based on results and longer-term outcomes.It has not gotten as much publicity as education, health care, early learning and prison sentencing reform, but Governor Kitzhaber has proposed another initiative that could be even more significant — a 10-year budget. Oregon currently operates on a biennial budget and some lawmakers in the past have pushed for annual budgets.

In typical Kitzhaber fashion, he has provided a lot of written material on his ideas for transforming the state's budget-making process. A host of documents exist on many state websites, including the governor's. Despite that, those toiling on the 10-year plan are doing so mostly out of the glare of publicity.

If the credentials of two of these leaders matter _ the state's chief operating officer, Michael Jordan, and long-time Kitzhaber aide Steve Marks _ then the process should produce results. Their goal is laudable _ take a longer than usual view of budget and program issues and install a performance-based approach to state budget-making. 

Consider the principles Kitzhaber and his team have enunciated:

         *  Any budget-making operation should start "with the amount that is available to spend."  State law already requires a governor to recommend a two-year budget balanced to existing revenue, without new revenue proposals, but few governors in the last 20 years have lived within that limitation.

         *  "The people who recommend budgets should be separated from the people who receive the money."  Such an arms-length relationship makes sense, at least in theory. On the other hand, budget-making is always a political process and various interests who get money show up at the Capitol every session to influence those who recommend budgets. In a free society, lobbying will occur on all fronts, including the state budget.

         *  We "should make budget decisions based on getting the best measurable results for the money available."  Speaking of turning government upside down, this will do it. Most current state programs are based on categories such as busyness and workload. For state workers, so many clients generate so many positions. Kitzhaber wants to budget based on buying results.

"Buying results" is a theme already in play. Take Senate Bill 964 from the 2011 legislative session. Sparked by Senator Alan Bates, D-Ashland, the bill was supposed to create a performance-based contracting system to reduce the state's disproportionately high foster care caseload. For the first time in social service statutory parlance, the phrase "performance-based contracting" was inserted into Oregon law. If you are a provider, you get a contract based on the performance you say you will achieve. If you don't produce, you lose the contract.

The 10-year plan faces other huge challenges. Because of constitutional limitations, no one — not the governor nor the legislature — can enforce budget principles or decisions beyond the existing two-year cycle, as one legislature cannot bind the next to any action or result. Plus, Kitzhaber himself cannot bind his successor, either two or four years from now, to anything he recommends.

That's why the Legislative Fiscal Office may face the prospect of dual budget tracks in the 2013 session, according to Capitol insiders. One would follow the Kitzhaber precepts of ordering expenditures around outcomes, while the other hews to the customary budgeting process of looking at spending agency by agency.

Despite the difficulty, here's wishing the governor and his lieutenants success. If nothing else, limits on available state money demand a different way of doing business.