Change Ohio Budget System

When most of us have to reduce spending, we do just that. We spend less than in the past. Government is different. Despite frequent wailing and gnashing of teeth about “spending cuts,” government almost never really reduces outlays.

Ohio uses much the same system of budgeting as most other states and the federal government. In effect, current spending is used as a baseline for future budgets. To that baseline are added amounts reflecting what agency heads believe they will need in the future.

Though the state’s general fund budget for the current two-year period is $25.9 billion, total spending in Columbus is much higher. The total for the 2009 fiscal year was $105.4 billion – and that was part of a steady increase from prior years, regardless of what state officials say about “cuts.”

But Ohio is in a budget crisis. It is expected revenue for the upcoming two-year state budget will be short of need by about $8 billion. Clearly, drastic changes need to be made.

Two budget experts have suggested the current system of setting expenditures should be abandoned. They are former Ohio Budget Director Greg Browning and nationally recognized expert David Osborne.

“Budgeting for outcomes” is their strategy, outlined in a new report on fiscal challenges facing Ohio.

The system advocated by Browning and Osbourne is more difficult for government to use – but also provides more accountability. It requires agencies to specify what results are expected from their operations, then determine what attaining those outcomes will cost.

“What this is really about is a system where you don’t start out with the status quo,” explained Browning. Instead, specific government services are outlined and their cost is estimated as accurately as possible.

Obviously, “budgeting for outcomes” makes sense in any environment. But with Ohioans worried, in effect, about making ends meet in state government, the system ought to be considered nearly mandatory. We encourage Gov.-Elect John Kasich to consider it carefully as a potential method of really saving money for Buckeye State taxpayers.