Reading about how budgets are made is probably not your favorite thing to do. But it is the process in state government where we decide how to spend your money. This year, sharing with you a broad understanding of the process is particularly important for two reasons. First, substantial cuts in spending are necessary this year to keep in line with revenue projections, and those cuts will affect most all of you reading this article. Second, change in the process is on the horizon, change that promises better results, better accountability, and a new flexibility to adjust annual spending to available revenues.

Budgeting is a process we are all familiar with from our Town Meetings (and even our households), a process that essentially aligns our money with our goals. The larger the organization the more complex is the process. Even “zero-based budgeting,” where you start from scratch rather than building on last year’s budget, is just a more sophisticated prescription for keeping the organization in business.

Historically, state departments and agencies develop estimates of what resources they will need to continue their missions. Those estimates are compiled and become the governor’s budget, which is presented to the Legislature, usually about the third week in January. The House Appropriations Committee, on which I serve, will hear from every agency head and we will dig down into the weeds of what is requested and why, a process that will take several weeks. At the end, we will either agree or disagree with the governor’s request and present the result to the full House. Once approved by the House, the budget goes to the Senate where a similar process occurs. Once the House and Senate agree, which most years requires a conference committee to iron out differences, the final product goes back to the governor for signature or veto.

This year is particularly painful as we are faced with a $150 million gap between estimated revenues and last year’s base spending. Both the Legislature and the executive branch agree on the bottom line, although we have yet to see where we might differ on the how. But one thing is clear and is agreed on by both executive and legislative leaders: we can no longer do business as usual.

So, a change in how Vermont state government decides to spend our money is afoot, and it starts from recognizing the reality that the annual budget process is a prescription for maintaining the status quo.

If you want change, you have to do something different. And “What is different?” is the question.

Let’s take an example: We as a culture long ago decided that childhood hunger is not okay, and we have committed enormous resources in money, public and private, enormous energy by dedicated people working in both government, nonprofits, volunteer, and even for-profit organizations, to help solve what we collectively have decided is a problem worth our efforts. And every year we ask what resources are necessary to keep afloat the network of organizations dedicated to working on the goal of reducing childhood hunger. And yet an intolerable number go hungry.

So our present budgeting system asks every year, what resources are needed to continue the existing effort to work on the goal of reducing childhood hunger, in other words, what input is needed. But what if we ask a different question? What if we ask “What does the outcome look like and how is it measured?” That shift in thinking allows us to say, for example, that childhood hunger will be reduced if 90% of 5-year-olds arrive at school having had breakfast. It encourages public and private dollars and energy to focus on moving toward that specific goal and prove that they achieved what they promised. In lean years the outcome might improve only one percent or two percent or not at all. In normal times, resources might be available to improve the outcome by five percent or more.

This process has a name. It is called performance-based budgeting. Vermont is not the first state to shift its budget-making effort. Other states have, notably Washington, Iowa, and Minnesota, all with the guidance of an organization called the Public Strategies Group. Find them at www.psg.us.

A great deal of work went on during the summer to bring together Vermont’s legislative and executive branch leaders to create a first effort to implement this shift in focus. We hired Public Strategies Group to guide us in what is a difficult shift in mind set, but so worth the effort when the realization sets in that the public dollar now leads much more directly to results and accountability for those results. It is not a surprise that Vermont’s budget crisis was the catalyst which led to this joint effort, as it was in other states. We humans are, after all, creatures of habit and sometimes need a wakeup call to do things differently.

So while the approval process through the House, Senate and on to the governor does not change, the preparation work done by the executive to compile a budget and the legislative process to review and agree or disagree with that proposal will become much more informed, much more focused on outcomes, and more dependent on proven results before committing more resources. And finally, the new process promises more transparency when the people doing the work, policy makers, and the public more clearly understand how their energy and their money is spent.

Ann Manwaring represents the towns of Wilmington, Whitingham, and Halifax in the Vermont Legislature. She can be reached at (802) 464-2150 or sandbox@sover.net.