Island County needs to reset its approach to budgeting
John Barnes, Communications Director, August, 2010
Island County voters soundly rejected a proposed property tax increase this month. In doing so, they told county commissioners they want them to do what all of us have been doing lately -- make do with less. The bottom line is clear: County government can't ignore the new economic reality faced by the citizens who fund it.
What the Board of County Commissioners shouldn't do, however, is use the blunt instrument of across-the-board budget cuts to address the deficit. It may make for better politics, but it's not sound policy. The commissioners insist they have no choice, but that's simply not true.
The traditional approach to government budgeting is to start with what's called "maintenance level" -- next year's cost for doing exactly what's being done this year. The problem is that, in addition to guaranteeing spending growth, this approach never forces county officials to re-evaluate the services they provide and how they provide them. As a result, when revenues flatten or drop, officials are unwilling to respond to new economic realities.
Two examples of a better approach are underway and offer a roadmap for Island County.
Gov. Chris Gregoire is telling state agency heads to re-evaluate all of their activities using several critical questions:
- Is the activity a core function of government or commercial in nature?
- If it is a core function, can the service be provided more efficiently and effectively through competitive contracting?
- Does it provide a broad public benefit or only serve a special interest?
- Does it duplicate the activities of nonprofits or other private initiatives?
- Does it duplicate the efforts of other agencies or programs?
- Does the activity demonstrate quantifiable performance?
This new thinking is taking place at the local level, too. Recently the city of Bellevue enacted a new budget process that City Manager Steve Sarkozy calls "a fundamental reset."
Under the new process, before the city funds an existing or new service, a department must submit it as a proposal and align it with a specific outcome. Evaluation teams write and rank the spending proposals depending on how each achieves the desired results, based on evidence and facts. The proposal has to precisely define what it is delivering in order to get funded. In other words, the city won't just spend money on a program simply because it always has. This is known as performance-driven budgeting.
Bellevue's "Budget One" plan is clear: there is no "base budget." There are no guarantees of historical funding levels. The underlying assumption is that forecast revenues will likely be less than past budgets, so the expectation is that the cost of government will be less than the current budget. "Departments are expected to utilize innovation, collaboration and creativity to meet this expectation," Bellevue officials say.
There are alternatives to across-the-board budget cuts in Island County, but commissioners must make bold decisions to truly scrutinize and prioritize services. The highest priority services should be funded first. If everything is a priority, then nothing is a priority.
County officials will likely claim they don't have the time or money to do this sort of evaluation and prioritization. But in doing so, they'd be telling the county's citizens that they're not interested in determining whether tax dollars are being spent effectively and efficiently.
Island County officials have great local examples to tap for ideas in crafting a new budget that lives within the county's means. Taxpayers here work hard to provide for their families and communities. Officials owe it to them to do everything possible, no matter how difficult, to prioritize spending and ensure public money is spent well. No option should be off the table. No more sacred cows.
To be sure, Island County commissioners face difficult challenges. To meet those challenges they must do what they have not yet done: fundamentally rethink what the county does and how it spends money. Their response must be innovative and outside-the-box. The times, and the county's hardworking taxpayers, demand no less.
John Barnes is the Communications Director for Washington Policy Center, a public policy research think tank in Washington state.