Budgeting for results.

• Author: Weintraub, Daniel M.
• Position: California's performance-based budgeting

California is about to dip a toe the waters of performance-based budgeting to see if it really does get results.

Mired in fiscal quicksand that already has brought about IOUs and a record-setting budget stalemate, California is considering a dramatic change in management.

The plan would eventually free bureaucrats to run their departments with minimal interference from lawmakers, but hold them more accountable for their performance.

While the new management style is not expected to generate immediate savings, it could reshape the way the state does business and force program managers to produce results that could be measured by the Legislature and the taxpayers.

Borrowed from the state of Texas and the San Francisco Bay area city of Sunnyvale, "performance-based" budgeting relies on a seemingly simple notion: Judge state programs not so much on how they spend their money, but on whether they get the job done.

Under California's current system, the Legislature and the Department of Finance scrutinize every item in the budget of each department and agency in state government. If a program's managers want to shift a dollar from travel to printing, for instance, they have to get permission.

And generally, as problems worsen, more money is allotted to deal with them. Schools, welfare, prisons and other programs annually report the anticipated increase in demand for their services and seek additional funds to cover the expansion.

"The entire state has grown accustomed to thinking, 'How much money am I getting?'" said Deputy Finance Director Steve Olsen, a chief architect of the plan proposed by Governor Pete Wilson. Instead, Olsen said, the question should be: "What are we trying to accomplish, and what's the best way to get there?"

As Olsen sees it, the line-item budget would be replaced by a broad document in which department managers and law-makers would agree on goals, but the bureaucrats would have wide latitude to spend their money as they see fit.

The Social Services Department might be rated on the number of people it moves from welfare to work. The Department of Parks and Recreation could be judged by asking campers if their state park visit was satisfactory. The Department of Alcohol and Drug Programs would track the clients served and determine how many kicked their habits and how many did not.

In return for signing performance "contracts" with the Legislature, the participating departments would be given new flexibility to run their...