Senate Bill 181

Senate Bill 181 will help Eliminate Wasteful Government Spending

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The traditional method of budget development, which relies upon incremental adjustments to expenditures made in the previous financial period, insulates governmental activities from the thorough fiscal review expected by taxpaying citizens.  New and changing demands for public services are met through excessive budget growth rather than by pruning obsolete programs and redirecting existing funds.  Some government programs were established so long ago that the original statutory basis has either been forgotten or is out of date.  In time, the budget is driven by inertia rather than by clear and defensible purposes.

Performance Based Budgeting is an effective method to counter the tendency toward perpetuation of outmoded state programs.

Senate Bill 181 would create a performance-based budget board to review the performance-based budget plans of Pennsylvania agencies and make recommendations on how each agency’s programs may be made more transparent, effective, and efficient.

Members of the board will include the Secretary of the Budget, the majority chairperson and minority chairperson of the Appropriations Committee of the Senate and House of Representatives.  Each state agency will submit a performance based budget plan in addition to any other information required by statute, rule or directive. In addition, they will provide the following information:

  • A mission statement on how the agency is accountable to taxpayers.
  • A description of activities that comprise the agency and justification for the existence of each activity.
  • An itemized amount of expenditures for each activity under the agency.
  • Ranking of all activities that shows the relative contribution of each activity to the overall goals and purposes of the agency.
  • A quantitative estimate of any adverse impacts that could reasonably be expected should an activity be discontinued as well as a full description of the methods by which the adverse impact is estimated.

Each agency shall receive a performance-based budget review no less than once every five years.  Starting 60 days after enactment, approximately 20% of agencies shall be subject to performance-based budget plan review each year.  After the Performance Based Budgeting Board submits their recommendations for each state agency, the Independent Fiscal Office (IFO) will review the recommendations and prepare a report that approves or disapproves the recommendations.

Benefits of Performance Based Budgeting
  • Provides transparency to government spending
  • Requires agency to outline accountability to Pennsylvania taxpayers
  • Eliminates wasteful government spending
  • Prevents excessive budget growth for outdated programs
  • Provides purpose for how funding is allocated and spent
  • Outlines measureable objectives for state agencies