Sandoval Administration Moves Forward With Priority-Based Budgeting Process

(Sean Whaley/Nevada News Bureau) – While there has been a lot of criticism directed at the details of Gov. Brian Sandoval’s proposed spending plan, there is acclaim for his development of a new budgeting process designed to ensure state agencies get results with taxpayer dollars.

The “Priorities and Performance Budget” completely changes the way the spending information is presented, said state Budget Director Andrew Clinger.

The single budget volume breaks out the spending for state agencies into activities, provides a ranking of the priority of the activities and where possible, includes measurements of how well objectives are met to achieve the goals of the spending priorities.

Clinger, in presenting the new budgeting format to lawmakers at a hearing last week, said much remains to be done to make the process complete, particularly in the use of “performance measures” to assess how well state agencies are meeting their goals. But it should help lawmakers in their budget review this session, he said.

“It really changes the discussion of the budget from looking at line items and talking about how many PCs (personal computers) or how many fax machines, and it really begins to look at what is it that we’re doing, what outcomes do we expect, and what are those outcomes costing us, and are we doing it in the most efficient and most effective manner possible,” Clinger said.

Senate Majority Leader Steven Horsford, D-Las Vegas, said he likes the new budget analysis.

“He (Clinger) did it without dollars and I think that’s great,” he said.

Efforts to change the way Nevada prepares its two-year budget have been attempted in the past. In 2009, outgoing Assembly Speaker Barbara Buckley, D-Las Vegas, pushed such a measure through the Legislature, but it was vetoed by former Gov. Jim Gibbons, who cited a failure to fund the cost of the effort.

The Legislature in this interim period then undertook its own fundamental review of budgets, many proposals which ended up in Sandoval’s two-year, $5.8 billion spending plan.

In his State of the State address, Sandoval said of the new budget process: “We articulate not only what level of priority each program or service carries, but the performance measures by which it will be judged. In the coming biennium, this initiative will expand to include public participation through websites and other tools as we ask Nevadans to further rank spending priorities. Even more robust performance indicators will therefore be established.”

The fundamental review was initiated under the direction of Gibbons as the 2011-13 budget was being developed this past summer. In a memo sent out by Clinger in June to agency officials, he outlined the new process: “We must create a budget process that looks first at the outcomes citizens expect. Some of the questions this new budget building approach needs to answer are: What is the proper role of state government? What services must we provide? What is the most efficient way to provide those services? And, what is the best way to pay for them?”

Horsford said he is pleased that Gibbons and Sandoval moved forward with the new review process.

“I’m glad that they followed through with the legislative intent as we passed it in 2009,” he said.

The Nevada Policy Research Institute, in a report released last month, called Nevada’s traditional budget process broken and called for fundamental change to bring about reasonable spending and improved performance in public education and other government services.

Geoffrey Lawrence, deputy director for policy at the free market think tank, said Nevada’s current “baseline” budgeting process, where every program is carried forward every two years with spending increases factored in for inflation or caseload growth, helped bring the state to its current financial crisis.

Lawrence described the new budget method outlined by the Sandoval Administration as not perfect, but offering a “refreshing departure from many poor budgeting practices of the past.”

He called it the first performance-based executive budget in Nevada history.

But it does have one shortcoming, Lawrence said.

“Sandoval fails to enumerate policy objectives in terms of priority,” he said. “Instead, government programs are lumped together in categories labeled ‘high,’ ‘medium’ and ‘low’ priority. Oddly, Sandoval’s budget team only put $143,914 of general fund spending in the ‘low’ priority category — while everything else received a ‘medium’ or ‘high’ priority demarcation. This reluctance to establish a clear-cut and meaningful hierarchy of spending undermines the value that this new approach adds.”