Performance Budgeting and Performance Funding in the States: A States Assessment

Abstract

For a variety of reasons, performance budgeting has gained new life in the 1990s. Initially introduced in the 1950s by the Hoover Commission and others, performance budgeting efforts, in the 1990s, go beyond the workload productivity and efficiency focus of earlier phases and place greater emphasis on outcomes and accountability. This study reports on a survey of state executive‐branch budget officers designed to determine the current status of state performance budgeting efforts including performance budgeting processes used by the states, their perceived impacts on budget decision making, and their probable future use. In addition, the study assessed the emerging role of performance funding as a further extension of performance budgeting processes. The linking of performance to the allocation or distribution of appropriated funds may be emerging as the next iteration of performance budgeting in the states. In addition to reporting on the survey, relationships between performance budgeting and various aspects of state budgeting practices are analyzed through crosstabulations, and regression analysis is employed to examine the states' organization, fiscal, and political capacity to implement performance budgeting and funding.

Convincing Legislators with Performance Measures

“…[9] Jordan and Hackbart believe that "the linking of performance to the allocation or distribution of appropriated funds may be emerging as the next iteration of performance budgeting." [10] Clearly, performance budgeting allows managers to use the economic value of programs to justify budget requests. This article analyzes managers' views about the use of performance measures to discover when legislators are most likely to employ performance numbers in funding decisions.…”

Performance-Based Budgeting: The U.S. Experience

“…Melkers and Willoughby find that only two states (Florida and Texas) have legislative guidelines for penalties (Melkers and Willoughby, 1998). Despite those legislative guidelines, Jordan and Hackbart find that Florida did not have a specified penalty percentage, and Texas indicated that 'in theory' all of the funding could be eliminated (Jordan and Hackbart, 1999). At the executive branch, the findings appear to be more positive.…”

“…At the executive branch, the findings appear to be more positive. Jordan and Hackbart summarize that 34 states use some form of PBB, and 29 states respond that gubernatorial budget recommendations are affected by performance measures (Jordan and Hackbart, 1999). However, they conclude that the actual impact of performance funding, defined as ''allocating or distributing a percentage of the appropriated funds contingent upon the assessment of the performance measures identified in the budget'' is minimal (Jordan and Hackbart, 1999, 74).…”

“…For example, the state of Connecticut is tacking the problem of incompatible reporting of program and fund-related data with its Automated Budgeting System (ABS). The ABS integrates program data with existing accounting data and generates program and financial performance measures (Jordan and Hackbart, 1999). Future research should elaborate the impact of using such an automated budgeting systems.…”

The Adoption of Outcome Measurement in Human Service Nonprofits

“…There has been significant scholarship aimed at understanding the effects of organizational capacity on performance measurement and management (e.g., Berman & Wang, 2000;Franklin, 2002;Jordan & Hackbart, 1999;Melkers & Willoughby, 2005). Jordan and Hackbart (1999) find that organizational capacity significantly influences the use of performance measures for budgeting and funding. Consistent with this, Berman and Wang (2000) suggest that the success of performance measurement depends on organizational capacity for undertaking performance measurement.…”