e-Texas Recommendations

While Texas has a successful planning and budgeting system for tracking the progress of individual state agencies toward various targets, the state has few meaningful accountability measures concerning statewide goals and benchmarks. Texas should amend its planning and budgeting processes to set specific targets for statewide benchmarks; create an online version of the state budget that links appropriations with state benchmarks and service categories; and fund “benchmark partnerships” among multiple state agencies pursuing common objectives.

Background

Texas will be entering its fifth biennium under the Strategic Planning and Budgeting System (SPBS). The SPBS links agencies’ strategic plans to the state budgeting process by using each agency’s strategic goals, objectives, and strategies as the basis for constructing the state budget. Performance measures developed under each budget strategy provide legislators with a basis for evaluating an agency’s success in achieving its objectives.

This system has succeeded in promoting agency accountability for performance. In fact, a recent survey by legislative staff found that 71 percent of the state’s legislators feel that performance-based budgeting has helped them to prioritize agency funding. Just 18 percent, however, think the system has allowed them to prioritize funding decisions across agencies.[1]

The 1995 Legislature adopted some refinements to the planning and budgeting system. Shortly thereafter, the Governor’s office issued Vision Texas: The Statewide Strategic Planning Elements for Texas State Government, a 1996 document containing functional area goals for the entire state and a set of related benchmarks intended to serve as indicators of progress toward the statewide goals.[2] The Vision Texas document has been reissued each biennium since then, with slight revisions to the benchmarks each time. The most recent Vision Texas release, dated February 2000, contains eight functional area goals and 81 state-level benchmarks.[3]

Despite the adoption of statewide goals, however, the state’s budget process still focuses primarily on individual agencies’ strategies and performance measures. Agency performance measures, for instance, have “targets” tied to a measurable achievement; statewide benchmarks, by contrast, do not have targets. While agencies must report on their progress toward meeting their targets, Texas does not prepare a corresponding report on the state’s progress toward the Vision Texas benchmarks.

State law requires that “the Comptroller, the Sunset Advisory Commission, the State Auditor, the Legislative Budget Board, or another agency that conducts performance audits of a state agency shall consider in the evaluation of an agency the extent to which the agency conforms to the agency’s strategic plan.”[4] The law does not provide a similar mechanism for evaluating the extent to which statewide goals are met.

A comprehensive accountability system would apply the same level of scrutiny to statewide goals that is currently applied to individual agencies. Such a system would ultimately be able to justify every dollar spent at the agency level and link each amount not only to agency goals, but to statewide goals and benchmarks as well, to enhance policymakers’ ability to make effective budget decisions.

Benchmarks and Service Categories

Beginning with the 1998-99 biennium, Texas state agencies have been required to link each budget strategy in their appropriation requests to at least one of the eight statewide goals, 81 state-level benchmarks, and 38 service categories. Service categories, such as “Higher Education Instruction” and “Mental Health” were developed by the LBB and the Governor’s Office of Budget and Planning so that state fiscal data could be organized into categories that cross functional and agency boundaries.

E-Texas asked the LBB to prepare a report identifying the links between all agency budget strategies and the statewide benchmarks and service categories in the fiscal 2000-01 state budget. The report relied on fiscal 2000 appropriations for the strategy amounts and the statewide benchmarks listed in the budget instructions sent to agencies by the LBB and the Governor’s office.

Under most of the statewide goals, funding was concentrated in just a few of the benchmarks. For instance, 75 percent of the state’s spending under the Public Education goal was found under Benchmark 5 (State share of public education costs). Under the Economic Development goal, 71 percent of the money was linked to Benchmark 7 (Highway system quality rating), since highway construction and maintenance spending dominates spending in this area. Similarly, 48 percent of spending under the Health and Human Services goal was linked to the Medicaid benchmark; 46 percent of all Public Safety and Criminal Justice spending was linked to the Cost of Incarceration benchmark.[5]

Some of the data, however, illustrate weaknesses in agency reporting. For example, each Vision Texas goal has a benchmark labeled “To be determined,” which is intended for agencies to use for any budget strategy that does not fit any other benchmark category, yet belongs within the statewide goal. Nearly 21.3 percent of the entire state budget was coded with a “To be determined” benchmark. (In addition, judicial agency appropriations were not linked to any statewide goal, since judicial agencies are not required to submit legislative appropriation requests.)

The use of the “To be determined” benchmark varies dramatically among the different functional goals. Funding linked to this benchmark ranged from 1.6 percent of all funding under the Public Education goal to 83.7 percent under General Government. Other functional goal areas with high percentages were Higher Education, with 60.4 percent; Natural Resources, with 44 percent; and Regulatory, with 38.5 percent.[6] The Texas Department of Mental Health and Mental Retardation, with more than $1.7 billion in fiscal 2000 appropriations, linked all of its budget strategies to the “To be determined” benchmark.[7]

Ten statewide benchmarks were not linked to any agency budget strategy. Other benchmarks showed confusing reporting patterns. For example, the Higher Education goal includes a benchmark measuring the “Percent of the adult population with a vocational/technical certificate or degree,” yet not one of the institutions in the Texas State Technical College System linked any of its budget strategies with this benchmark.

In summary, a number of statewide benchmarks that are clearly intended to reflect state priorities in their functional areas are not linked to any state funding. Agencies often appear to find it difficult to link their strategies to benchmarks within their functional areas. In such cases, most agencies simply opt for the “To Be Determined” benchmark.

While benchmark and service category reporting could be a valuable tool for analyzing state spending and results, little effort has been expended to control the quality of this information. In addition, better wording of specific benchmarks and service categories could improve the usefulness of these data.

Online Appropriations Act

State fiscal data are readily available by agency, goal, strategy, and functional area, but the information is not organized into the service categories that cross functions and agencies, making it difficult to evaluate the statewide delivery of services.

The General Appropriations Act (GAA) details the amount of money appropriated for each agency. However, legislators and members of the public alike may also want to know how much money is spent in a service category or to achieve a statewide goal, regardless of the agencies involved. Internet technology could be used to disseminate such spending information in a variety of formats.

“Benchmark Partnerships”

To achieve greater progress toward statewide goals, the Legislature should consider funding “benchmark partnerships” that include multiple agencies. As a step in this direction, two or three benchmarks could be highlighted in the upcoming budget cycle. A percentage of the total funding available for each benchmark then could be set aside and appropriated to benchmark partnerships based on proposals submitted jointly by agencies choosing to participate in the partnership.

Both the Texas Youth Commission (TYC) and the Texas Juvenile Probation Commission (TJPC), for instance, are responsible for the incarceration and supervision of juvenile offenders. TYC performs this function directly, while TJPC does so indirectly by funding and monitoring local juvenile probation departments. Most of the funds appropriated to these two agencies are shown under service category 31, “Incarceration and Supervision of Juvenile Offenders.” According to the LBB report, this service category received $306 million in fiscal 2000; of that amount, TJPC received $107 million and TYC $198 million. Of these amounts, in turn, $35.2 million of TJPC’s funding and $32.9 million of TYC’s are linked to the benchmark “Average rate of juvenile re-incarceration rate within three years of release.”

To forge a stronger partnership between these programs, the Legislature could set aside a certain percentage of the funds allocated to this benchmark for a benchmark partnership between TJPC and TYC intended to reduce the rate of juvenile re-incarceration within three years of release.

Other States’ Efforts

A number of states have built strong accountability measures into their performance reporting and budgeting systems. Two efforts are particularly noteworthy.

Oregon has been a leader in performance reporting, with well-defined and measurable statewide goals. Oregon’s Progress Board (http://www.econ.state.or.us/opb/) produced a 1989 report, Oregon Shines, which established statewide goals and measurable benchmarks. The most recent report detailing progress toward the state’s benchmarks, Achieving the Oregon Shines Vision: The 1999 Benchmark Performance Report, was released in March 1999. The report includes 92 individual state benchmarks that measure outcomes and indicators in broad categories ranging from crime to skills development. Where available, data are included that show how these indicators have changed over the decade; projected or targeted levels are presented for 2000 and 2010.[8]

Florida’s Governor’s office places its recommended state budget (www.state.fl.us/budget) on the Internet with indices allowing budget information to be identified by functional area and agency. Called the “e-budget,” detailed performance measure information is linked with the appropriate budget section intended to achieve those results. In addition, budget details are linked to appropriate references within related documents such as the Governor’s policy budget.

Such efforts demonstrate significant progress toward developing the critical components of a strategic planning and budgeting system. To date, however, e-Texas has been unable to identify any state with a comprehensive system that links actual spending for any given program to statewide goals, with built-in performance measures to determine the effectiveness of spending decisions from the program level to statewide goals.

Recommendations

A. The Strategic Planning and Budgeting System should be amended to include targets for statewide benchmarks as part of the state’s budget process.

The Governor’s office and the Legislative Budget Board (LBB) should release a statewide annual report documenting the state’s progress toward the targets.

B. The Governor’s office and the LBB should review and refine the statewide goals, benchmarks, and service categories at the beginning of each budget cycle.

Each benchmark should be linked to a service category, and each service category should have one or more benchmarks.

C. The LBB should create an online version of the General Appropriations Act that would allow legislators, agency personnel, and the general public to view and print out appropriations by service category and by benchmark, as well as by agency.

In addition to viewing appropriations by individual agency, Internet users should be able to view the strategies that contribute to each benchmark or service category, the dollar amounts appropriated for each of these strategies, and the total funding for all of the strategies under a single benchmark or service category. Three different views of the GAA that should be available online are shown in Exhibit 1.

Current Appropriations Pattern By Agency	Proposed Appropriations Pattern By Benchmark	Proposed Appropriations Pattern By Service Category
State	State	State
Article	Statewide Goal
Agency	Statewide Benchmark	Service Category
Agency Goals
Agency Strategies	Agency Strategies	Agency Strategies

D. As an incentive for agencies to work together to improve the state’s performance toward its benchmarks, the Legislature should set aside a portion of the funds available within each benchmark and appropriate them to “benchmark partnerships” of two or more state agencies.

Benchmark partnerships will facilitate the evaluation of service delivery from a statewide perspective.

Fiscal Impact

Improved accountability among state agencies would not have a direct fiscal impact on the state budget, but it would enable policymakers to make better-informed decisions concerning the use of state funds.

No direct fiscal impact should result from the creation of “benchmark partnerships.” Raising the level of accountability concerning progress toward statewide benchmarks should result in better and more efficient service delivery as well as long-range savings to the state.

[1] Texas House Appropriations Committee and Senate Finance Committee, “Members Perceptions of the Performance-Based Budgeting System,” Austin, Texas, October 1998.

[2] According to the state strategic plan, a benchmark is “the quantified standard against which achievement of a stated goal, objective, or strategy can be measured. It is a tool for gauging ‘added value’ performance that benefits the customer/stakeholder or progress toward achieving increased productivity and strategic efficiency.”

[3] Governor’s Office, Vision Texas: The Statewide Strategic Planning Elements for Texas State Government (Austin, Texas, February 2000).

[5] Legislative Budget Board, “LBB Internal Working Document: Goals and Benchmarks” (Austin, Texas, April 20, 2000). (Computer printout.)

[6] Comptroller calculations based on “LBB Internal Working Document: Goals and Benchmarks.”

[7] Texas Department of Mental Health and Mental Retardation, Legislative Appropriations Request for FY 2000-2001 (Austin, Texas, September 1998).

[8] Oregon Progress Board, Achieving the Oregon Shines Vision: The 1999 Benchmark Performance Report (Salem, Oregon, March 1999).

Improve Accountability in State Government