Proposed Budget Process Changes Omit Key Information
A recently introduced bill appears to be aimed at tilting the state budget process in favor of spending cuts or freezes. It does that in the guise of seeking more information from state agencies about budget options, but it fails to do so in a way that will facilitate a balanced and well-informed public debate of budget choices.
The proposed legislation – SB 407 and its Assembly twin, AB 534 – would require state agencies to submit two additional things with their biennial budget requests: a) a proposal that would maintain the existing level of funding, and b) a proposal to cut the agency’s budget by 5%.
If legislators want information from agencies that will help guide state lawmakers in where and how to make budget cuts, that’s their privilege. My concern about the bill isn’t about the information it would require from agencies, because I think shining more light on budget options is a good thing. However, in a democracy the public has a right to be involved in budget choices, and the bill fails to ask agencies for a fundamental piece of information that is critical for an informed public debate: how much funding is needed to maintain government services at their current level.
Closing this gap in knowledge about the Wisconsin budget isn’t a lot to ask, and it should be a bipartisan goal. Almost half the states produce what is sometimes referred to as a “current services baseline” budget or a “continuation budget” – i.e., an estimate of the cost of maintaining the status quo. The continuation budget or current services baseline can be much different than a spending freezing, and a paper by the Center on Budget and Policy Priorities explains the role of these baseline budget calculations:
“A current services baseline is a reality check in the budget process. …It reflects the impact of factors that cause year-to-year variations in the cost of providing a given service and the number of people who use it, such as inflation, changing wage levels, population growth, and economic and demographic shifts, as well as enacted policy changes that have yet to take effect.”
Establishing the current service baseline would be useful for state lawmakers regardless of their partisan or ideological preferences. It would provide a reasonable way of sizing up the state’s surplus or deficit without having to use the flawed gauge of state agency budget requests that sometimes have increased because of proposed policy changes, or in some cases have been suppressed by directions from a governor. Keep in mind that after the 2010 gubernatorial election, it was the incoming governor’s transition team that complained that the agency budget requests underestimated the amount of funding that was needed to maintain the status quo, and from their perspective understated the amount of cutting that would be needed to balance the budget.
If the authors of SB 407 and AB 534 truly want to improve budget decision making, they won’t stop at requiring agencies to submit new information on options for cutting spending. They should also require agencies to calculate and publish the current services baseline. That change would generate critical information for members of the public who follow the budget deliberations, as well as for legislators, and I think such an amendment would result in much broader support for the recently proposed legislation.