BILL REQ. #: H-5011.1
State of Washington | 58th Legislature | 2004 Regular Session |
READ FIRST TIME 02/10/04.
AN ACT Relating to focusing the state budgeting process on outcomes and priorities; amending RCW 43.88.090 and 43.88.030; adding a new section to chapter 43.88 RCW; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 A new section is added to chapter 43.88 RCW
to read as follows:
The legislature finds that the incorporation of agency missions,
goals, and objectives into the state budgeting process has not produced
a sufficient focus on outcomes, as opposed to mere outputs. It is the
intent of the legislature to refocus the state budgeting process on how
state agencies are producing real results that reflect the goals of
statutory programs. Specifically, budget managers and the legislature
must have the data to determine that agencies are using taxpayer
funding to move toward objectives that produce the intended public
benefit. This data must be supplied in an impartial, quantifiable
form, yet it must be more than mere statistics that do not demonstrate
progress toward intended goals. With a renewed focus on achieving true
results, state agencies, the office of financial management, and the
legislature will be able to prioritize state resources among their most
effective uses.
Sec. 2 RCW 43.88.090 and 1997 c 372 s 1 are each amended to read
as follows:
(1) For purposes of developing budget proposals to the legislature,
the governor shall have the power, and it shall be the governor's duty,
to require from proper agency officials such detailed estimates and
other information in such form and at such times as the governor shall
direct. It is the governor's responsibility to communicate priority
government functions to agencies for use in developing budget
recommendations for their agency. In developing these priority
functions, the governor shall utilize a process that provides for
public involvement and input. The estimates for the legislature and
the judiciary shall be transmitted to the governor and shall be
included in the budget without revision. The estimates for state
pension contributions shall be based on the rates provided in chapter
41.45 RCW. Copies of all such estimates shall be transmitted to the
standing committees on ways and means of the house and senate at the
same time as they are filed with the governor and the office of
financial management.
The estimates shall include statements or tables which indicate, by
agency, the state funds which are required for the receipt of federal
matching revenues. The estimates shall be revised as necessary to
reflect legislative enactments and adopted appropriations and shall be
included with the initial biennial allotment submitted under RCW
43.88.110. The estimates must reflect that the agency considered any
alternatives to reduce costs or improve service delivery identified in
the findings of a performance audit of the agency by the joint
legislative audit and review committee. Nothing in this subsection
requires performance audit findings to be published as part of the
budget.
(2) Each state agency shall define its mission and establish
measurable goals for achieving desirable results for those who receive
its services and the taxpayers who pay for those services. Each agency
shall also develop clear strategies and timelines to achieve its goals.
This section does not require an agency to develop a new mission or
goals in place of identifiable missions or goals that meet the intent
of this section. The mission and goals of each agency must conform to
statutory direction and limitations.
(3) For the purpose of assessing program performance, each state
agency shall establish program, quality, and productivity objectives
for each major program in its budget. The objectives must be
consistent with the missions and goals developed under this section.
The objectives must be expressed to the extent practicable in outcome-based, objective, and measurable form unless an exception to adopt a
different standard is granted by the office of financial management and
approved by the legislative committee on performance review. In
particular, objectives must specifically address the substantive
purpose of the program and shall focus on data that measure whether the
agency is achieving or making progress toward the purpose of the
program. Objectives that merely list output or similar statistics are
presumptively insufficient. The office of financial management shall
provide necessary professional and technical assistance to assist state
agencies in the development of strategic plans that include the mission
of the agency and its programs, measurable goals, strategies, and
performance measurement systems.
(4) Each state agency shall adopt procedures for and perform
continuous self-assessment of each program and activity, using the
mission, goals, objectives, and measurements required under subsections
(2) and (3) of this section. Agencies' progress toward the mission,
goals, objectives, and measurements required by subsections (2) and (3)
of this section is subject to review as set forth in this subsection.
(a) For agencies headed by gubernatorial appointees, the office of
financial management shall quarterly conduct reviews of selected
programs to analyze whether the objectives and measurements submitted
by agencies demonstrate progress toward the agencies' mission and
goals.
(b) For agencies headed by commissions or separately elected
officials, the commission or official shall conduct quarterly reviews
of selected programs to analyze whether the objectives and measurements
submitted by agencies demonstrate progress toward the agencies' mission
and goals.
(c) The office of financial management, in consultation with the
higher education coordinating board, shall conduct annual reviews of
comprehensive and research higher education institutions to analyze
whether the objectives and measurements submitted by institutions
demonstrate progress toward the institutions' mission and goals.
(d) The office of financial management, in consultation with the
state board for community and technical colleges, shall conduct annual
reviews of randomly selected community and technical colleges to
analyze whether the objectives and measurements submitted by colleges
demonstrate progress toward the colleges' mission and goals.
(e) The goal is for all programs to receive at least one review
annually.
(5) It is the policy of the legislature that each agency's budget
((proposals)) recommendations must be directly linked to the agency's
stated mission and program, quality, and productivity goals and
objectives. Consistent with this policy, agency budget proposals must
include integration of performance measures that allow objective
determination of a program's success in achieving its goals. Where a
review under subsection (4) of this section or other analysis
determines that the agency's objectives demonstrate that the agency is
making insufficient progress toward the goals of any particular program
or is otherwise underachieving or inefficient, the agency's budget
request shall contain proposals to remedy or improve the program. The
office of financial management shall develop a plan to merge the budget
development process with agency performance assessment procedures. The
plan must include a schedule to integrate agency strategic plans and
performance measures into agency budget requests and the governor's
budget proposal over three fiscal biennia. The plan must identify
those agencies that will implement the revised budget process in the
1997-1999 biennium, the 1999-2001 biennium, and the 2001-2003 biennium.
In consultation with the legislative fiscal committees, the office of
financial management shall recommend statutory and procedural
modifications to the state's budget, accounting, and reporting systems
to facilitate the performance assessment procedures and the merger of
those procedures with the state budget process. The plan and
recommended statutory and procedural modifications must be submitted to
the legislative fiscal committees by September 30, 1996.
(6) In reviewing agency budget requests in order to prepare the
governor's budget request, the office of financial management shall
consider the extent to which the agency's programs demonstrate progress
toward the priorities and functions identified by the governor and the
legislature, along with any specific review conducted under subsection
(4) of this section. If the agency's objectives demonstrate that the
agency is making insufficient progress toward the priority functions or
is underachieving or inefficient in producing measurable results, the
office of financial management, in consultation with the agency, shall
propose remedies or improvements.
(7) In the year of the gubernatorial election, the governor shall
invite the governor-elect or the governor-elect's designee to attend
all hearings provided in RCW 43.88.100; and the governor shall furnish
the governor-elect or the governor-elect's designee with such
information as will enable the governor-elect or the governor-elect's
designee to gain an understanding of the state's budget requirements.
The governor-elect or the governor-elect's designee may ask such
questions during the hearings and require such information as the
governor-elect or the governor-elect's designee deems necessary and may
make recommendations in connection with any item of the budget which,
with the governor-elect's reasons therefor, shall be presented to the
legislature in writing with the budget document. Copies of all such
estimates and other required information shall also be submitted to the
standing committees on ways and means of the house and senate.
Sec. 3 RCW 43.88.030 and 2002 c 371 s 911 are each amended to
read as follows:
(1) The director of financial management shall provide all agencies
with a complete set of instructions for submitting biennial budget
requests to the director at least three months before agency budget
documents are due into the office of financial management. The
director shall provide agencies and committees that are required under
RCW 44.40.070 to develop comprehensive six-year program and financial
plans with a complete set of instructions for submitting these program
and financial plans at the same time that instructions for submitting
other budget requests are provided. The budget document or documents
shall consist of the governor's budget message which shall be
explanatory of the budget and shall contain an outline of the proposed
financial policies of the state for the ensuing fiscal period, as well
as an outline of the proposed six-year financial policies where
applicable, and shall describe in connection therewith the important
features of the budget. The budget document or documents shall also
describe, in detail, the accountability measures to demonstrate
measurable improvement towards priority policy functions. The message
shall set forth the reasons for salient changes from the previous
fiscal period in expenditure and revenue items and shall explain any
major changes in financial policy. Attached to the budget message
shall be such supporting schedules, exhibits and other explanatory
material, including performance data, in respect to both current
operations and capital improvements as the governor shall deem to be
useful to the legislature. The budget document or documents shall set
forth a proposal for expenditures and performance goals in the ensuing
fiscal period, or six-year period where applicable, based upon the
estimated revenues and caseloads as approved by the economic and
revenue forecast council and caseload forecast council or upon the
estimated revenues and caseloads of the office of financial management
for those funds, accounts, sources, and programs for which the forecast
councils do not prepare an official forecast, including those revenues
anticipated to support the six-year programs and financial plans under
RCW 44.40.070. In estimating revenues to support financial plans under
RCW 44.40.070, the office of financial management shall rely on
information and advice from the transportation revenue forecast
council. Revenues shall be estimated for such fiscal period from the
source and at the rates existing by law at the time of submission of
the budget document, including the supplemental budgets submitted in
the even-numbered years of a biennium. However, the estimated revenues
and caseloads for use in the governor's budget document may be adjusted
to reflect budgetary revenue transfers and revenue and caseload
estimates dependent upon budgetary assumptions of enrollments,
workloads, and caseloads. All adjustments to the approved estimated
revenues and caseloads must be set forth in the budget document. The
governor may additionally submit, as an appendix to each supplemental,
biennial, or six-year agency budget or to the budget document or
documents, a proposal for expenditures in the ensuing fiscal period
from revenue sources derived from proposed changes in existing
statutes.
Supplemental and biennial documents shall reflect a six-year
expenditure plan consistent with estimated revenues from existing
sources and at existing rates for those agencies required to submit
six-year program and financial plans under RCW 44.40.070. Any
additional revenue resulting from proposed changes to existing statutes
shall be separately identified within the document as well as related
expenditures for the six-year period.
The budget document or documents shall also contain:
(a) Revenues classified by fund and source for the immediately past
fiscal period, those received or anticipated for the current fiscal
period, those anticipated for the ensuing biennium, and those
anticipated for the ensuing six-year period to support the six-year
programs and financial plans required under RCW 44.40.070;
(b) The undesignated fund balance or deficit, by fund;
(c) Such additional information dealing with expenditures,
revenues, workload, performance, and personnel as the legislature may
direct by law or concurrent resolution;
(d) Such additional information dealing with revenues and
expenditures as the governor shall deem pertinent and useful to the
legislature;
(e) Tabulations showing expenditures classified by fund, function,
activity, and agency. However, documents submitted for the 2003-05
biennial budget request need not show expenditures by activity;
(f) A delineation of each agency's ((activities)) program
performance, including those activities funded from nonbudgeted,
nonappropriated sources, including funds maintained outside the state
treasury;
(g) Identification of all proposed direct expenditures to implement
the Puget Sound water quality plan under chapter 90.71 RCW, shown by
agency and in total; and
(h) Tabulations showing each postretirement adjustment by
retirement system established after fiscal year 1991, to include, but
not be limited to, estimated total payments made to the end of the
previous biennial period, estimated payments for the present biennium,
and estimated payments for the ensuing biennium.
(2) The budget document or documents shall include detailed
estimates of all anticipated revenues applicable to proposed operating
or capital expenditures and shall also include all proposed operating
or capital expenditures. The total of beginning undesignated fund
balance and estimated revenues less working capital and other reserves
shall equal or exceed the total of proposed applicable expenditures.
The budget document or documents shall further include:
(a) Interest, amortization and redemption charges on the state
debt;
(b) Payments of all reliefs, judgments, and claims;
(c) Other statutory expenditures;
(d) Expenditures incident to the operation for each agency;
(e) Revenues derived from agency operations;
(f) Expenditures and revenues shall be given in comparative form
showing those incurred or received for the immediately past fiscal
period and those anticipated for the current biennium and next ensuing
biennium, as well as those required to support the six-year programs
and financial plans required under RCW 44.40.070;
(g) A showing and explanation of amounts of general fund and other
funds obligations for debt service and any transfers of moneys that
otherwise would have been available for appropriation;
(h) Common school expenditures on a fiscal-year basis;
(i) A showing, by agency, of the value and purpose of financing
contracts for the lease/purchase or acquisition of personal or real
property for the current and ensuing fiscal periods; and
(j) A showing and explanation of anticipated amounts of general
fund and other funds required to amortize the unfunded actuarial
accrued liability of the retirement system specified under chapter
41.45 RCW, and the contributions to meet such amortization, stated in
total dollars and as a level percentage of total compensation.
(3) The governor's operating budget document or documents shall
reflect agency goals, objectives, and outcomes as required by RCW
43.88.090.
(4) The governor's operating budget document or documents shall
contain proposals to remedy or improve programs that are determined to
be underachieving or inefficient as determined by the analysis of
agency goals, objectives, and outcomes required by RCW 43.88.090.
(5) A separate capital budget document or schedule shall be
submitted that will contain the following:
(a) A statement setting forth a long-range facilities plan for the
state that identifies and includes the highest priority needs within
affordable spending levels;
(b) A capital program consisting of proposed capital projects for
the next biennium and the two biennia succeeding the next biennium
consistent with the long-range facilities plan. Insomuch as is
practical, and recognizing emergent needs, the capital program shall
reflect the priorities, projects, and spending levels proposed in
previously submitted capital budget documents in order to provide a
reliable long-range planning tool for the legislature and state
agencies;
(c) A capital plan consisting of proposed capital spending for at
least four biennia succeeding the next biennium;
(d) A strategic plan for reducing backlogs of maintenance and
repair projects. The plan shall include a prioritized list of specific
facility deficiencies and capital projects to address the deficiencies
for each agency, cost estimates for each project, a schedule for
completing projects over a reasonable period of time, and
identification of normal maintenance activities to reduce future
backlogs;
(e) A statement of the reason or purpose for a project;
(f) Verification that a project is consistent with the provisions
set forth in chapter 36.70A RCW;
(g) A statement about the proposed site, size, and estimated life
of the project, if applicable;
(h) Estimated total project cost;
(i) For major projects valued over five million dollars, estimated
costs for the following project components: Acquisition, consultant
services, construction, equipment, project management, and other costs
included as part of the project. Project component costs shall be
displayed in a standard format defined by the office of financial
management to allow comparisons between projects;
(j) Estimated total project cost for each phase of the project as
defined by the office of financial management;
(k) Estimated ensuing biennium costs;
(l) Estimated costs beyond the ensuing biennium;
(m) Estimated construction start and completion dates;
(n) Source and type of funds proposed;
(o) Estimated ongoing operating budget costs or savings resulting
from the project, including staffing and maintenance costs;
(p) For any capital appropriation requested for a state agency for
the acquisition of land or the capital improvement of land in which the
primary purpose of the acquisition or improvement is recreation or
wildlife habitat conservation, the capital budget document, or an
omnibus list of recreation and habitat acquisitions provided with the
governor's budget document, shall identify the projected costs of
operation and maintenance for at least the two biennia succeeding the
next biennium. Omnibus lists of habitat and recreation land
acquisitions shall include individual project cost estimates for
operation and maintenance as well as a total for all state projects
included in the list. The document shall identify the source of funds
from which the operation and maintenance costs are proposed to be
funded;
(q) Such other information bearing upon capital projects as the
governor deems to be useful;
(r) Standard terms, including a standard and uniform definition of
normal maintenance, for all capital projects;
(s) Such other information as the legislature may direct by law or
concurrent resolution.
For purposes of this subsection (((3))) (5), the term "capital
project" shall be defined subsequent to the analysis, findings, and
recommendations of a joint committee comprised of representatives from
the house capital appropriations committee, senate ways and means
committee, legislative transportation committee, legislative evaluation
and accountability program committee, and office of financial
management.
(((4))) (6) No change affecting the comparability of agency or
program information relating to expenditures, revenues, workload,
performance and personnel shall be made in the format of any budget
document or report presented to the legislature under this section or
RCW 43.88.160(1) relative to the format of the budget document or
report which was presented to the previous regular session of the
legislature during an odd-numbered year without prior legislative
concurrence. Prior legislative concurrence shall consist of (a) a
favorable majority vote on the proposal by the standing committees on
ways and means of both houses if the legislature is in session or (b)
a favorable majority vote on the proposal by members of the legislative
evaluation and accountability program committee if the legislature is
not in session.
NEW SECTION. Sec. 4 If specific funding for the purposes of this
act, referencing this act by bill or chapter number, is not provided by
June 30, 2004, in the omnibus appropriations act, this act is null and
void.