Op – Ed by David Coates, former Managing Partner of KPMG and Vermont Business Roundtable Member, and Bruce Lisman, former Chairman of J.P. Morgan Company’s Global Equity Division
A long campaign season ahead, lots of gubernatorial candidates, and an economic catastrophe that may change how we think about economic growth make for an ideal environment in which to consider new approaches to how we govern our State. This economic crisis is forcing us to re-examine with fresh eyes our tax structure, our educational funding and our public pension plans. And there is another idea worthy of public discussion.
A report by The Pew Center on the States’ Governance Performance Project makes the case that states should embrace results-oriented budgeting. Simply put, it argues that states should measure the results of their spending programs. It’s logical and so much so, that it’s surprising that a state as small and intimate as Vermont does not already do so. Nonetheless, agencies across the entire state enterprise have inconsistent methods of accountability, if any at all.
Now is the right moment for our government to take the first steps toward achieving performance-oriented budgeting. Think about it this way – People have the right to demand proof that programs work before more money is spent. It’s logical and it’s right but it isn’t easy. The Pew Center suggests that it takes a full and shared commitment of governors, legislators, state employees, and citizens to take a data-driven results-oriented approach. And, it requires a building block approach, because it will take both time and money to build a methodology and the tools necessary to make it work better over time.
Vermont can, and should, do this. Any program supported by public funds needs to have goals, steps to reach those goals, guideposts of what constitutes success along the way, and a way to measure results. Too complicated? No, it’s simply offering proof of purpose and proof of results. And, it gives credence to the notion that we have a fiduciary responsibility to spend finite tax dollars well.
Here is what we, as citizens, might get for converting to this approach:
- Better prioritized spending programs, particularly in the absence of a long-term strategic budget.
- Measurable results; some programs with great success should receive greater support, while others without sensible outcomes or results might be re-cast or eliminated.
- Greater effectiveness and efficiency to our spending efforts. What’s the best way to conserve energy? Don’t waste it. What’s the best way to conserve money? Don’t waste it.
- Better management and, maybe, stronger managers in our State government. It requires more than a good presentation and a good cause to attract funding in a system that measures results.
- Greater accountability to our government process. There is no better cure for the unnatural distance of any government from its people than honesty about how well government programs are working. And,
- Greater transparency to the process of our government at work.
It may also replace (with well informed discussion) those angry political arguments that dominate our state’s political landscape and provide a first and most important step toward the re-enfranchisement of those who pay the lion’s share of taxes that fund most state spending. Tell them that their tax dollars are well spent, and they may stick around.
There are lots of things that we can do for ourselves in what is likely to be a fragile and prolonged economic recovery. This is a first good step and one that Vermonter’s will not regret.
What do you think?