OFM sends agencies instructions for 2013-15 budget
Last week the Office of Financial Management (OFM) sent state agencies instructions for building Governor Gregoire's last budget proposal (assuming no special sessions or across-the-board budget cuts beforehand) due this December for the 2013-15 budget. OFM Director Marty Brown warned agencies:
I wish I could say that our economic situation has stabilized but, despite some positive signs, we still face a degree of uncertainty about revenues and caseloads in both the current and ensuing biennia. The new budget must continue to re-examine all state functions to ensure that only essential services are funded, and that those services are delivered with maximum efficiency and attention to outcomes.
To this end, OFM will once again go through an internal Priorities of Government (POG) process this summer to take a zero-base look at state activities and results. This assessment may involve additional direction and requests for information over the next several months. Agencies should update current performance measures, and prepare to be engaged in a discussion of policy alternatives as well as potential reductions.
We expect that General Fund resources for new budget initiatives will be very limited. The Governor’s priority for new money, if any, will be for K-12 education . . .
We encourage you to think in terms of buying what you need, not buying back what you had. Agencies are also encouraged to make fee-based programs self-supporting.
Among the questions agencies are expected to answer when submitting their budget requests:
Is the activity a core function of government?
In other words, is it mandatory because it is:
- Required by constitutional mandates, court decisions, or federal law?
- Essential for preventing loss of life, addressing imminent issues of public safety, or avoiding immediate and catastrophic loss of state property?
- Necessary for the governance of mandatory activities?
If non-mandatory, does the activity have any of the following implications:
- Required by state law (RCW)?
- Governed by an existing contract (may include collective bargaining agreements)?
- Part of federal matching funds?
- Produces General Fund or other state revenues?
- Supported by fees?
Does the activity provide a broad public benefit or only serve a select clientele or constituency? If the activity benefits a select clientele, can and should the clientele pay the cost?
Does it duplicate the activities of non-profits or other private initiatives?
Does it duplicate the efforts of other government agencies or programs?
Can this service or function be provided by way of performance contracts?
If not, why not?
Next Wednesday (June 20) the Economic and Revenue Forecast Council will officially update the state's estimated revenue for the remainder of the biennium. Along with any changes to the revenue forecast it will be interesting to see if the Council maintains its 40% probability of the pessimistic outlook occurring (or a $1.5 billion drop in projected revenue) due to economic uncertainty.
Of particular importance in this regard is the fact lawmakers left only $46 million in the state's unrestricted ending fund balance when adopting the 2012 supplemental budget.
Along with building the initial 2013-15 budget proposal, Governor Gregoire's staff is currently engaged in negotiations with state employee unions to forge the 2013-15 state labor contracts that will bind the next Governor for the first few years of his term.