Starting From Zero

When legislators begin work on the state’s new budget, the product they produce will have an inherent flaw: the assumptions on which it was built. Rather than starting from zero, the new biennium’s budget will do like so many before it, building from the current baseline. That’s a raw deal for Texans.

Starting with previous levels of spending is the fatal flaw in government budgeting. The presumption is that every dollar previously allocated is an ongoing obligation; it assumes that previously established priorities are still the most important.

belt tightening

Baseline-budgeting is the handmaiden of government growth. It’s a sloppy way to do business and steward the people’s money. Fundamental questions about efficiency and efficacy are harder to ask — let alone answer — when everyone is focused on the incremental increases from previous budgets, rather than determining whether or not the need for the expenditure exists.

Every expenditure, in every budget, should be examined anew. Under our state constitution, one legislature cannot commit the next to any expenditure. Yet with baseline budgeting, that is precisely the outcome.

A better way for legislative bodies interested in protecting taxpayers and improving efficiency is zero-based budgeting. Simply put, a budget cycle begins not with the previous budget’s numbers, but with zeros.

Agencies, boards, commissions and programs must be required to justify every dollar they are to get from the taxpayers, not just the newest.

Obviously, there are “costs” to zero-based budgeting. Notably, it increases the time it takes for a budget to be prepared.

For this approach to be effective, every entity in state government has to approach their own internal budget preparation in the same way — with zero as their starting point. Otherwise, the system becomes a farce, with lawmakers replacing their own baseline with that developed by the agency (which is often the case today, anyway).

But when approached correctly, zero-based budgeting can ensure that dollars flow first to the programs and agencies that have the most immediate impact for the people of Texas.

As legislators consider systemic reforms for 2013, enacting zero-based budgeting should be high among them. Whether used every session or on a set cycle, the exercise of starting the budget numbers from scratch will keep the natural tendency to bloat government coffers under control.

Rather than being held hostage to the well-meaning political decisions of the past, zero-based budgeting allows the legislature to put the taxpayers’ hard-earned money to work more effectively on the pressing issues of the day.

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Michael Quinn Sullivan

Michael is president and CEO of Empower Texans. A graduate of Texas A&M, former newspaper reporter, one-time Capitol Hill staffer, think tank vice president, and an Eagle Scout, Sullivan is married with three children. He divides his time between the Metroplex, the rest of Texas, and Austin.

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