A Bit of Good News on State Budgeting

This won't make this year's budget picture any brighter, but two bills passed by the state Senate today represent important steps to make the process of creating budgets more rational, responsible and easier-to-understand.

One bill, SB 1020, establishes what is called performance-based budgeting (in short, requiring agencies to have clear performance goals and tying the budget process to how successful they are in achieving those performance goals. It also establishes more regular legislative oversight of state programs. You might have thought the legislature would do this sort of thing already, but unfortunately, they don't.

The other bill, SB 1426, requires more long-term budget planning and establishes pay-as-you-go (often referred to as PAYGO) rules for major new ongoing programs in the governor's budget. What does that mean, in English? It means if the governor proposes new programs in the budget, the governor will have to identify off-setting items that can be used to pay for the programs. (Both bills are part of a package of proposals advanced by the reform group California Forward).

Critics will argue that these new budget rules could be tighter, and that they don't represent a solution to the major structural problems in the budget. But progress and budget reform has been so hard to come by in California that the eventual enactment of this legislation (which passed the senate overwhelmingly) would represent major progress--and at the very least would put California on a path to more rational budgeting.

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