the make new york work plan (1) -- restructuring state government
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KAPLOWITZ 2010 | RESTRUCTURING STATE GOVERNMENTA Comprehensive Plan to Reduce Government Spending and Maximize Efficiency
I. REDUCE STATE SPENDINGNew Yorkers can no longer afford to foot the bill for Albanys extravagant spending. For
too long, New Yorks budgets have put forth spending commitments that dramatically
outpace realistic revenue growth. Irresponsible debt practices and profligate spending,
coupled with significant job losses, have severely weakened our financial condition.
Since the year 2000, state spending has increased by over 80 percent, from $73.6 billion
in SFY 2000-01 to $133.8 billion in SFY 2010-11.1 Over the same period, state debt has
risen to over $52 billion. The State faces budget gaps of $30 billion over the next three
years, even after closing a budget gap of approximately $9 billion for the fiscal year
beginning April 1, 2010. At the same time, many localities face severe financial
difficulties that will significantly impede their ability to provide quality public services to
our citizens.
These considerable fiscal challenges will require the states leaders to find creative and
effective solutions to reestablish a stable financial footing. A comprehensive and
disciplined fiscal policy will help the state reverse patterns of unsustainable spending,
rising debt levels and structural budgetary imbalances. Drawing on his experience as a
financial planner, Mike Kaplowitz will work hard to implement a series of effective
budgetary controls that will finally impose a heavy dose of financial discipline.
1 Office of the State Comptroller: Comprehensive Annual Financial Report2010, available athttp://www.osc.state.ny.us/finance/index.htm
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Impose a State Spending Cap
A statutory and constitutional spending cap is absolutely necessary to limit the excessive
growth in state spending that has gone unchecked for decades. Limiting spending growth
in the State Operating Fund to the rate of inflation will impose budgetary discipline both
in times of economic prosperity and decline, and force state lawmakers to confine budget
priorities within reasonable expense limits. This is a simple, non-partisan and consistent
way to contain reckless spending.
Freeze Public Sector Hiring and Salary Increases
New York State has one of the largest and fastest growing public sector workforces in the
country, yet the manner in which public services are delivered is sorely lacking in
efficiency and cost-effectiveness. With over 164,000 full-time employees across over 50
state agencies, the state now spends more than $15 billion on salaries and non-personal
services costs. This represents a significant expense for the state and must be controlled.
Contracts for 96 percent of the State workforce must be renegotiated beginning April 1,
2011. As gubernatorial candidate Andrew Cuomo has suggested, we must freeze salary
increases for state workers for one year as part of a short-term financial austerity plan.
Cut Down of the Use of Outside Consultants
In SFY 2008-09, at a time when the state was facing severe fiscal constraints, spending
on outside consultants, including support staff, rose to $2.9 billion; a $100 million
increase from the prior fiscal year. That is the equivalent of 23,329 full time consultants
working for the state. Based on reports filed with the New York State Comptroller, the
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state pays outside consultants performing professional services an average of $160,719
each annually; 62 percent more than public employees doing similar work, including the
cost of their benefits. By some estimates, the state could save between $280 and $480
million annually by replacing about half of the states expensive private consultants with
employees already on the state payroll.2
As State Senator, Mike Kaplowitz would sponsor legislation directing the Division of
Budget to set consultant spending savings targets for each state agency. He would also
work to institute a freeze on new and renewed state agency consultant contracts over
$100,000 until a cost-benefit analysis is completed by the agency and a waiver is
approved by the DOB.
Reduce Pension Costs
According to estimates by the Office of the State Comptroller, the cost of public pensions
and health benefits for active and retired public employees will grow from $1.3 billion in
1998-99 to $6.2 billion in 2013-14almost a 500 percent increase. Next to public health
and education spending, pension benefits are one of the most significant cost-drivers in
the state budget. The recent pension reforms creating a Tier V for new employees was a
step in the right direction, but did not go nearly far enough. We must re-evaluate what
benefits the State provides and to whom, including increasing employee contributions.
We must also concentrate our efforts on fighting the abuses of the pension system that
have been uncovered, especially among employees near retirement who manipulate
2http://www.nyspef.org/fact_sheets/2010/reducestatespendingonconsultants.pdf
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overtime schedules to increase retirement benefits. A new Tier VI would crack down on
pension padding and overtime issues that drive up pension costs.
Fix Medicaid
The State of New York faces growing budget gaps in the next several years, and a chief
source of pressure on the State budget is the growth of Medicaid costs. In SFY 2009-10,
Medicaid spendingState, federal, and localtotaled over $50 billion, the equivalent of
more than one-third of the States All Funds budget. Between 2009-10 and 2013-14, this
total is expected to grow by 27 percent to $63.5 billion, an average annual increase of
nearly seven percent. Over the same period, the States share of Medicaid costs will
increase much fasterby 71 percent, an average annual increase of nearly 18 percent
because of the expiry of federal stimulus aid.3
In 2014, because of the recently enacted
federal health care reform law, increased numbers of New Yorkers are projected to enroll
in Medicaid, further increasing State costs. Worse, New York State spends 69 percent
more per beneficiary than the national average.4
The State cannot do an adequate job of managing the increasing number of enrollees and
their associated costs, let alone adjust to the changes contemplated by federal health care
reform, unless it changes the way in which Medicaid manages, delivers and pays for
health care. A fundamental restructuring would be driven by the following imperatives:
A) The State must do a much better job of controlling over-utilization of
Medicaid services. An important element of this is having the State take over
3 These figures do not reflect the recent extension of the temporary FMAP increase through June, 2011.4See Carol Kellerman, Citizens Budget Commission recommendations for the fiscal year 2009-10 budgetto State Legislators, (February 02, 2009).
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responsibility for administration of Medicaid from the counties. Once the
State capped the counties Medicaid costs, counties lost all incentive to
control costs in the program.
B) The State must change the process by which Medicaid sets rates of
reimbursement to health care providers in order to increase the programs
capacity to control costs and improve outcomes.
C) The State must also address cost pressures arising outside Medicaid through
reform of its medical malpractice system and a more aggressive push for
preventative care in underlying treatment areas such as substance abuse,
cardiovascular disease and childhood obesity.
D) Adequate funding for the Office of the Medicaid Inspector General (OMIG) is
critical for the State to effectively cut down on fraud, waste and abuse.
Improve the Efficiency of Education Spending
In addition to Medicaid, education spending is one of the fastest growing state expenses.
Since 2003-04, school aid has increased at more than twice the rate of inflation. 5 To
mitigate the unsustainable growth in education spending, the state must ensure that
school aid is targeted and fair, providing support to those school districts most in need.
Also, other subsidies (e.g. building aid, reimbursable aid) must be scrutinized so that
these policies do not create a perverse incentive for school districts to ignore efforts to
5See NYS Division of Budget, 2010-11 Executive Budget press release available athttp://www.budget.state.ny.us/pubs/press/2010/pressrelease10eBudget01.html.
http://www.budget.state.ny.us/pubs/press/2010/pressrelease10eBudget01.htmlhttp://www.budget.state.ny.us/pubs/press/2010/pressrelease10eBudget01.htmlhttp://www.budget.state.ny.us/pubs/press/2010/pressrelease10eBudget01.html -
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control costs. Coordination between school districts can boost efficiency and save money
overall; a recent study from the State Comptrollers Office estimated that $145 to $365
million couldbe saved from the consolidation of school back office services.6
State policymakers must also focus on eliminating mandates on school districts that
dramatically increase the cost of providing a quality education. Mandate reform will
better position local districts to reduce costs, including personnel costs which account for
over 70 percent of school district expenses.7
School district personnel costs have been
growing at a rate of close to six percent annually. Reducing that growth by half would
enable school districts to save approximately $1 billion annually, while freezing
personnel costs would generate approximately $2 billion in savings from projected
growth rates.8
Establish a Statewide Care Coordination Planfor New Yorks Mentally Ill
Care Coordination is a method of strengthening the support networks for New Yorks
mentally ill population. While various baseline support programs are available to adults
suffering from mental illnesses, support networks that focus on long term care and patient
stability are inadequate, which can often result in repeated hospitalizations,
incarcerations, homelessness and potential injury to oneself or others. These negative
6NYS Comptrollers Office, 2010 Annual Report on Local Governments, available athttp://www.osc.state.ny.us/localgov/datanstat/annreport/10annreport.pdf.7 New York State Commission on Property Tax Relief, Final Report, (December 1, 2008) pg. 34, availableathttp://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdf.8 This is based on the following calculation: Estimates of growth rates from 06-07 and 07-08 from the NYSCommission on Property Tax Reliefs Final Report (pg. 35); Total school spending is assumed to be about$50 billion. Three percent multiplied by 0.7 (for the percent of spending accounted for by personnel costs)produces savings of $1.05 billion on a $50 billion base spending level.
http://www.osc.state.ny.us/localgov/datanstat/annreport/10annreport.pdfhttp://www.osc.state.ny.us/localgov/datanstat/annreport/10annreport.pdfhttp://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdfhttp://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdfhttp://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdfhttp://www.cptr.state.ny.us/reports/CPTRFinalReport_20081201.pdfhttp://www.osc.state.ny.us/localgov/datanstat/annreport/10annreport.pdf -
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consequences are not only detrimental to a patients overall health, but are a serious drain
on the states limited resources.
By assigning care coordinators to enrolled members, New Yorks mentally ill will have
the support and assistance of trained professionals who will, among other things:
A) Develop Individualized Service Plans (ISPs) to identify existing state services,
support programs and providers that will help patients in recovery, enhancing
wellness and satisfaction (the ISP is web-based and shared across state-
supported service programs to boost efficiency);
B) Use best efforts to provide or arrange for desired services and support
programs;
C) Ensure that services are being provided as identified by the ISP; and
D) Support the ISP as the single plan for service delivery.
As a Westchester County Legislator, Mike Kaplowitz spearheaded the effort to establish
Westchesters first Care Coordination program under the countys Department of
Community Mental Health.9
Within its first year, the program significantly reduced
patient stays in State hospitals, days incarcerated, emergency room visits and rates of
homelessness. The reduced strain on secondary government services resulted in a fiscal
9http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450.
http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450http://mentalhealth.westchestergov.com/index.php?option=com_content&task=view&id=808&Itemid=1450 -
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savings of over $1 million in Westchester County, from only 48 enrollees in the first year
of the program.
As State Senator, Mike Kaplowitz would work collaboratively with officials from the
New York State Department of Mental Health to implement a statewide Care
Coordination plan for the more than 500,000 New Yorkers who are served by New
Yorks mental healthcare system each year. By expanding Westchesters successful
model statewide, projected savings could exceed $20,000,00010
, and the long term health
and wellness of our mentally ill population would be dramatically improved.
II. RESTRUCTURING STATE GOVERNMENT TO MAXIMIZE EFFICIENCY
New Yorks State and local governments have become too big, too expensive, and too
ineffective. There are countless State agencies, boards, commissions, departments,
councils, divisions, offices, task forces and public authorities that collectively make up a
slow, antiquated, bureaucratic state government apparatus that continuously struggles to
meet the needs of our citizens with efficiency. New Yorks overlapping system of local
government today consists of more than 10,500 governmental entities, while the
proliferation of special taxing jurisdictions and other specialized administrative entities
has needlessly disjointed service delivery at the local level. This oversized and
inefficient bureaucracy is not only duplicative and inefficient, but also extraordinarily
expensive.
10This rough calculation aggregates Westchester Countys savings figures as a result of the CareCoordination program ($1.1 million) as a function of the countys share of New York States overallpopulation (4.86%). $1.1 million/0.0486 = $22,633,745.
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Mike Kaplowitz will make it a priority to restructure and rightsize the existing
bureaucratic mess by:
A) Targeting structural waste and inefficiency in state government;
B) Reducing and consolidating the number of local governments and special taxing
jurisdictions throughout the state;
C) Consolidating New Yorks various economic development agencies;
D) Holding Industrial Development Agencies accountable; and
E) Continuing the effort to rein in New Yorks public authorities.
Reducing Structural Waste and Inefficiency
With the proliferation of state agencies, government is no longer operating as a single,
integrated unit working collaboratively and efficiently to accomplish the various public
policy goals of the State. Agencies have their own modes of organization and
procedures, their own bureaucracy and their own constituencies who are extremely
reluctant to change. Consider, for example, the Department of Health. In just this one
single agency, the Legislature has inserted at least 87 statutorily created administrative
units, including 46 councils, 17 boards, 6 institutes, 6 committees, 5 facilities, 2 task
forces, 2 advisory panels and a working group. In total, the Executive Department now
consists of at least 75 administrative units, almost all frozen in statute.11
11 Cuomo 2010, The New NY Agenda: A Plan for Action; pg. 66.
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As State Senator, Mike Kaplowitz will carefully assess the performance and effectiveness
of every state entity and work to streamline their functions through the consolidation and
leveraging of shared resources. Eliminating this inefficiency and waste will save
taxpayers hundreds of millions of dollars.
Local Government Consolidation
Government at the local level in New York is rife with excessive redundancies,
duplicative service delivery and overlapping responsibilities. Currently, there are more
than 10,500 local governmental entitiesincluding 62 counties, 932 towns, 555 villages
and more than 7,000 special districts all of which are imposing taxes and fees on
struggling New York individuals and families.12
Despite the important public services
provided by many of these local government entities, as a recent report from the
Comptrollers Office explained, [o]ur municipal structure is not only highly complex,
[but] it no longer provides a rational differentiation based on population densities and
settlement patterns, as it did when the classifications were originally made. 13 Moreover,
New Yorks ballooning local government structure is responsible for much of the high
local tax burden that New Yorkers have been shouldering for too long.
The Government Reorganization and Citizen Empowerment Act, authored by Attorney
General Andrew Cuomo, was a critical first step in the states effort to eliminate legal
12 There is no definitive study on how many local governments New York actually has. The Department ofState, the Office of the State Comptroller and most recently, the New York State Commission on LocalGovernment Efficiency and Competitiveness (known as the Lundine Commission) have arrived atdifferent numbers. A survey by the New York State Attorney Generals Office found 10,521 total localgovernments. A breakdown of that number can be found athttp://www.ag.ny.gov/bureaus/legislative/governmentconsolidation/govs.html.13 Office of the New York State Comptroller, Outdated Municipal Structures, available athttp://www.osc.state.ny.us/localgov/pubs/research/munistructures.pdf.
http://www.ag.ny.gov/bureaus/legislative/governmentconsolidation/govs.htmlhttp://www.ag.ny.gov/bureaus/legislative/governmentconsolidation/govs.htmlhttp://www.osc.state.ny.us/localgov/pubs/research/munistructures.pdfhttp://www.osc.state.ny.us/localgov/pubs/research/munistructures.pdfhttp://www.osc.state.ny.us/localgov/pubs/research/munistructures.pdfhttp://www.ag.ny.gov/bureaus/legislative/governmentconsolidation/govs.html -
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barriers to government mergers and empower citizens to reorganize their local
governments by dissolving or merging the many taxing layers that have contributed to
New Yorks high local tax burden (the highest in the country). To ensure that local
governments and citizens maximize the potential for efficiency and consolidation offered
by this act, Mike Kaplowitz will work to provide adequate financial incentives and
reorganizational expertise to all local governments. Additionally, he will continue efforts
to eliminate remaining legal barriers to the integration and merger of municipal services.
Consolidation of Economic Development Agencies
Currently, economic development efforts are balkanized across as many as 28 separate
agencies14
and hundreds of public entities with economic development missions,
including over 600 local development corporations, 115 local industrial development
agencies, 72 local Empire Zone boards, 50 business improvement districts, 49 urban
renewal agencies and community development agencies and 10 regional planning
councils.15
This bloated economic development apparatus results in overlap, duplication and waste,
and acts as an entrenched impediment to giving the public the best service at the lowest
cost. Mike Kaplowitz, in working to better position New York State to lead our
economic recovery, will support legislation that consolidates the efforts and
14 See A.T. Kearney,Delivering on the Promise of New York State: A Strategy for Growth & Revitalization12 (2007)report prepared for Empire State Development, available athttp://www.nycp.org/publications/2007 0717 ATKearney report.pdf.15 Cuomo 2010, The New NY Agenda: A Plan for Action; pg. 97.
http://www.nycp.org/publications/2007%200717%20ATKearney%20report.pdfhttp://www.nycp.org/publications/2007%200717%20ATKearney%20report.pdfhttp://www.nycp.org/publications/2007%200717%20ATKearney%20report.pdf -
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responsibilities of these disparate economic development entities under the auspices of a
single State Office of Economic Development.
Restore Accountability of Industrial Development Agencies (IDAs)
A pattern of poor performance and unfulfilled job creation promises by Industrial
Development Agencies (IDAs) and qualifying IDA-partner developers has
become clear, suggesting that broad-based reforms are urgently necessary to
ensure that IDA subsidies fulfill their mission of creating jobs and stimulating
economic growth. Between the 116 IDAs currently operating in New York State,
nearly $400 million in annual tax exemptions are offered in support of local
economic development initiatives. But an analysis of the most recent data
reported by IDAs to the NYS Comptrollers Office indicates that New Yorkers
are not getting their moneys worth.
IDAs provided $385 million in tax exemptions in 2005 which resulted in a net
loss of $266 million in property taxes to local governments, including $136
million in lost revenue to school boards.16
Subsidized projects only managed to
deliver 36% of the total number of jobs promised, and almost 70% of IDAs
statewide subsidized companies that actually cut jobs.17
Because these benefits implicate the power of the State and come at the expense
of the State and local coffers, it is important to carefully monitor and control IDA
16New York Office of the State Comptroller. IDAs Project Approval, Evaluation, and MonitoringEfforts. (2006)17 Ibid, pg. 5.
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operations to ensure that IDA-supported projects deliver the benefits that their
proponents promise. At a time when local municipalities and school districts are
shouldering the burden of increasing costs associated with Medicaid, pension
obligations, schooling and an eroding tax base, it is crucial that taxpayers hold
IDAs and the projects they support accountable. Specific reforms that Mike
Kaplowitz will work to implement include:
A) Improved Standards for determining who receives IDA assistance. Current
law does not require IDAs to set basic standards for the projects that are
subsidized and the jobs that are created. Mike Kaplowitz will ensure that
IDAs limit their subsidies to projects that provide quality jobs and fair wages
that will sustain New York families, build our local economies, and make a
positive impact on our communities and our environment.
B) Greater Transparency in the decision-making and reporting processes of
IDAs to provide the communities that are affected with the necessary
information to advocate for their needs, or raise concerns about negative
impacts. Stronger reporting requirements for subsidy recipients will also make
it easier for communities to keep track of a developers activities and evaluate
their performance.
C) Stronger Accountability measures that will hold businesses accountable for
their poor performance in meeting job creation and economic development
goals. By working to institute clawback procedures, localities will be
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authorized to cancel, reduce or recover a subsidy when the recipient fails to
deliver the promised benefits or violates its contractual obligations.
Public Authorities Reform
New Yorks public authorities were originally created in 1921 to circumvent the
Constitutional requirement of voter approval of State debt.18
After decades of
exponential growth, the State now has several hundred public authorities created either
by statute or as subsidiaries of other authorities.19
Public authorities perform a multitude
of services previously provided through State agencies or local governments, including
economic development, transportation infrastructure development and housing.
Sadly, like the increasingly complex web of state agencies, public authorities have
proliferated to an extent that has compromised their effectiveness. Moreover, authorities
are responsible for approximately 93 percent of the States indebtedness (over $48 billion
as of 2009).20 The bloated size and inefficiency of public authorities, as well as their
steep price tag, demand reform.
As State Senator, Mike Kaplowitz will work to enhance existing reform efforts to
increase transparency, strengthen accountability measures, and improve debt
management. Created pursuant to the Public Authorities Reform Act of 2009, the
independent Authorities Budget Office (ABO) has collected, analyzed and disseminated
18 See N.Y. Const. Art. 7, Sec. 11 (prohibiting the State from contracting a debt unless the debt shall beauthorized for some single work or purpose by the people at a general election).19 Lynn Wilson and Clayton Eichelberger,New York State Public Authority Reform: Where We Have ComeFrom and Where We Need to Go, 11 N.Y.S.B.A. Govt, Law and Policy Journal. 15-16 (2009).20 See Scott Fein,Introduction: Public Authority Reform, 11 N.Y.S.B.A. Govt, Law and Policy Journal;pg. 5 (2009).
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to the public a plethora of information on the finances and operations of state and local
public authorities. With this influx of new information, the Legislature is better
positioned to exercise its oversight and enforcement powers under state law to institute
best management practices, streamline operations, boost efficiency, and ensure that New
Yorkers are getting their moneys worth.
Specific reforms include:
A) Statutory limit on the creation of subsidiaries within existing state or local public
authorities. Certain provisions of the 2009 Public Authorities Reform Act
addressed the excessive creation of subsidiaries, but stronger provisions are
necessary to ensure that any newly-created subsidiaries are absolutely necessary,
and that their anticipated purpose does not fall under the scope of the operational
responsibilities of another authority or existing state agency.
B) Lower the monetary threshold of authority contracts that must be approved by the
State Comptroller from $1 million to $500,000.
C) Institute an annual debt ceiling for public authorities. New state authority debt
issued in 2009 alone amounted to over $17.7 billion. The state can no longer be
expected to meet the unsustainably high service payments on this debt.
III. BUDGET REFORMS
New York State is in dire need of a comprehensive reform plan to fix the States broken
budget process and give New Yorkers a fiscally responsible state spending plan. For
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decades, Albany has ignored the need for wholesale changes to the budget process,
instead opting for quick fix gimmicks on the back of misguided assumptions. As State
Senator, Mike Kaplowitz will work to implement wholesale changes to the budget
process, helping to establish a long-term, sustainable financial planning model, stricter
accounting principles, and stringent standards of accountability for State-financed
programs and services through the use of performance-based budgeting (a budgeting
concept that links funding decisions to program results).
GAAP Budgeting
It is time for New York to shed its reliance on fiscal gimmickry and manipulation by
requiring both the Executive Budget and the Enacted Budget to be balanced according to
Generally Accepted Accounting Principles (instead of the current cash-basis accounting
method), which will fundamentally realign recurring spending with recurring revenue to
restore fiscal stability. Mike Kaplowitz will also insist on reforms that will mandate that
all state operating funds be balanced each fiscal year, not merely the General fund.
Mandate an Annual Tax Expenditure Report
This would require the Executive to submit to the Legislature an Annual Tax
Expenditure Report that would list a cost-benefit analysis of all of New Yorks 380-plus
tax break programs, so that we may focus our efforts on strengthening the programs that
work, and ending the programs which waste hundreds of millions of dollars in revenue.
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Performance-Based Budgeting
In February 2009, the Pew Center on the States issued a report on effective performance-
driven and data-based budgeting methods. According to the Pew Center, states that are
successful in such endeavors are those that combine short-term strategies to balance
their budgets with long-term fiscal and management investments to serve vital public
needs and position themselves for the future.21 In the same report, the Pew Center
singled out New York as a state whose inability to budget for performance is a weakness.
While some New York State agencies report program performance information in their
strategic plans, performance information does not appear to be well integrated in the
decision-making process [of the budget].22
For example, New York currently does not:
Define clear, statewide outcome goals as part of a long-term strategic framework;
Have a uniform system of soliciting performance information from agencies or
programs;
Give instructions on how to assemble such information; or
Include performance information or connect funding determinations to
performance measures or targets in either the Governors proposed budget or the
legislatures appropriations bills.
21 The Pew Center on the States, Trade-Off Time: How Four States Continue to Deliver, Feb. 2009.22 The Pew Center on the States, Government Performance Project: New York, 2008.
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New Yorks budget process is best described as incremental budgeting. In other
words, an agencys budget is primarily based on the amount it was allocated the previous
year, although broad economic or political changes (such as recessions or changes in
administration) can result in an agency requesting and/or receiving more or less than they
did the year before. Incremental budgeting has its advantages; it is a very stable process
with few, if any, great changes in funding from year to year. However, it often
encourages wasteful or unnecessary spending to maintain or increase allocations in future
budgets, and creates no incentives to reduce costs. Over time, budget allocations can
disconnect from statewide priorities, leading to ineffective or relatively low priority
legacy programs getting more money than newer, more effective programs.
New York can meet the standard of smart, effective, and transparent budgeting that has
been set by the best practices of other states by re-evaluating the way it budgets. New
York should consider adopting budgeting methods that:
A) Build a long-term strategic framework for the state, with clearly defined outcome goals;
B) Refocus agency missions and performance measures to chart progress toward those
goals;
C) Use the information gathered to better inform the budget process, improve state program
performance, and engage the public.
In short, New York should consider adopting a system of performance-based budgeting.
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Who Uses Performance-Based Budgeting?
The federal government adopted the Government Performance and Results Act (GPRA)
in 1993, a form of performance-budgeting which required all federal agencies to develop
five-year strategic plans setting out long-term goals and objectives and to submit annual
performance reports with their budget requests. A review of the GPRA by the General
Accounting Office (GAO) found that the act established a solid foundation of results-
oriented performance planning, measurement, and reporting in the federal government.23
A 2010 report by the Center for American Progress notes, however, that in practice [the
GPRA] has led more to the preparation of reams of paper than clarity on the outcomes
agencies are trying to achieve.24
President Obama has recognized these deficiencies and
is addressing them by asking his agencies to work towards and report on a targeted set of
high-priority objectives, rather than just producing a litany of agency activities.
Virtually every state has adopted a requirement for some form of measuring agency or
program results, a crucial first step in implementing a system of performance-budgeting.
New York is not one of them. Most states have requirements for measuring performance
that do not tie the measurements to statewide goals or use the information for smarter
budgeting. However, there are a handful of states that lead the way in performance-
budgeting best practices. Virginia has an acclaimed system of legislating for results that
includes a bipartisan and multi-branch approach to setting statewide goals and
publicizing progress towards those goals.
23 U.S. GAO, GPRA Has Established a Solid Foundation for Achieving Greater Results, Mar. 2004.24 Center for American Progress, Golden Goals for Government Performance, Feb. 2010.
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As State Senator, Mike Kaplowitz will make the design and implementation of a
comprehensive performance-based budgeting process a top priority. With a state budget
exceeding $133 billion, it is imperative that each budget allocation is thoroughly
evaluated and measured against the outcomes of that spending.