Tell me where the money went.

• Author: Hosansky, David
• Position: Florida's state budgeting reform effort

Florida officials spent months suffering through the throes of establishing performance measures that would suggest what the state was getting for its money.

For years, as state spending skyrocketed in Florida, policymakers were at a loss to figure out exactly what they bought with all that taxpayer money.

It was hard to figure out the cost of many government programs because the budgeting and accounting systems didn't break down state spending that way. No one could figure out which programs helped the public the most because agencies didn't measure performance. They couldn't even effectively freeze spending for categories such as part-time salaries or new equipment because agencies could win approval from the governor's office to transfer funds into those categories after the part-time lawmakers returned to their districts.

By the time the state budget reached $35 billion last year--triple the spending of 10 years ago--lawmakers' frustrations reached the boiling point.

"We desperately need to do something," said Senator Patricia Grogan, a freshman who taught government budgeting classes at the University of Central Florida. "The way we've chosen to present budgets doesn't tell us anything meaningful. I defy anybody to look through the budget act itself and tell us what they're buying."

So Florida, which won nationwide kudos for reforming its health care and workers' compensation systems, took a giant step this year toward reforming government budgeting.

Led by Governor Lawton Chiles, the fiscal expert who formerly chaired the U.S. Senate Budget Committee, the Legislature revamped the state budget system from top to bottom. Over the next seven years, Florida will gradually adopt a version of "performance-based budgeting"--agency by agency. Legislators will turn over line-item funding decisions to agency managers. Managers will have to prove their programs are serving the public or risk loss of funds. A beefed-up legislative auditing committee will help set specific goals for programs and ensure that those goals are met.

Sunshine State experts believe the changeover will be laborious, requiring scrapping or rewriting many performance measures. But at a time when other states are struggling to increase their accountability, Florida lawmakers hope their gradual approach will provide the nation with a model for budgeting.

"Florida's effort is very comprehensive," said Dominic Calabro, president of the watch-dog Florida TaxWatch. "It's an attempt over several years to define proper goals and objectives and have an independent evaluation process...There's an opportunity here to change the incentive structure over time by focusing on outcomes."

The reforms came only after decades of criticism of the states' confusing budget system--and repeated reports by the auditor general's office about tens of millions of dollars in wasted taxpayers' money.

DEEP TROUBLE

By the beginning of this year, it was clear that Florida's budgeting system was in deep trouble.

State spending, propelled by a booming population and an ever growing demand for services, increased faster than inflation and the population combined. But many services declined. Inmates were released from prison early because of overcrowding, the school dropout rate was among the worst in the nation and parents waited for years to get their children into subsidized care programs. Moreover, conditions were likely to get even worse: Economic forecasts by...