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Entries in performance-based contracting (2)


Kitzhaber's 10-Year Budget

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.

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Knowing What You Buy in State Government 

There were a couple of interesting developments in state budgeting last week.

First, Governor Kitzhaber ordered a hiring freeze in state government, a step many observers thought had already been taken in response to the continuing downturn in state revenue. His order followed a request from the three co-chairs of the Joint Ways and Means Committee who are preparing for a budget-dominated legislative session in February.

Second, Kitzhaber's chief operating officer for state government, Michael Jordan, appeared before the annual Business Summit in Portland to summarize a new bare-bones approach to the state government budget for the 2013-15 biennium. According to observers who heard the Jordan presentation, it will depart from the time-honored approach of building one biennial budget on top of another without taking a zero-based look at programs.

But the headline of this blog states another key premise that should exist in state government.

If you, as a state agency manager, are buying something from a private sector contractor, you should know what you are buying. If you, as a state legislator, are reviewing or voting on an agency budget, you should know what you are buying.

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