Oct 29 2009
It’s the budget time of year again
It’s that time of year again - the budget cycle has begun and we await the Governor’s release on January 10th.
During the fall, agencies and departments submit BCPs (Budget Change Proposals) to the Department of Finance (DOF) to change their budgets. These BCPs are supposed to include taking away money for temporary positions that are expiring, removing temporary programs and funding increases, and any other increase or decrease the department/agency sees for their budget. In reality, the departments do not submit decreases. If they were given a temporary increase, unless the DOF analyst realizes it, they won’t submit the proposal for the decrease. Instead, they just close their eyes and hope no one notices.
Right about now, the analysts at DOF are finalizing recommendations. They have already sent questions about the BCPs to the departments, and hoped for some sort of response. Often times, the departments don’t even respond to the question. Sometimes, the DOF analyst doesn’t get what he needs to make an informed decision, and so he has to deny the proposal. Other times the department is so political or so sensitive to the Administration, that it doesn’t matter what the proposal looks like, you are told to find a way to approve it (this happens with OPR and CalFire the most). The DOF analyst doesn’t always get to analyze, which means that all the proposals which get approved aren’t the best.
There are other things being done with the budget as well. Increases for employee compensation are being worked out, and figured out per department or agency. Increases in operating expenses and equipment are being worked on, based on inflation. How much money each department gets for personnel is being worked on (this is called the 7A - a listing of what positions the department/agency has in each category), and temporary position salaries - but not operating expenses and equipment associated with the position - are being removed from budgets.
But what isn’t being looked at is what the department or agency is doing with their current money. If the department or agency had to justify each dollar they were getting, and each staff position they had, it would be a long process. But it is a necessary one. When the state is spending money without knowing what it is going to, or what programs are being funded that are unsuccessful, the state cannot function. The state government is so large that programs cannot be evaluated objectively, because there is no one who knows what all the programs are supposed to do. Some programs are supposed to submit reports to the Legislature, but those reports are prepared by the department with statistics compiled by the department and are, generally, exactly what the department wants you to see. Nothing objective about that.
Why not have everyone justify their money? When a person, or a business, is in an economic slump, they go through their budget with a fine tooth comb. Many people make decisions about things they like to do versus what they have to do. Is there enough money to pay for new car tires and go out to eat three times a month? These are tough decisions. Is there enough money to fund after-school activities and provide teachers to help students read? These are tough decisions too, but they have to be made.
Instead of spending this time worrying about what departments and agencies think should be done with their budgets, DOF should comb through the budgets with a fine tooth comb. A million dollars saved in one program, a million saved in another - pretty soon that adds up to real money that can be used to help balance California’s budget.
After all, DOF is supposed to be the professional fiscal advice to the governor. It is about time they start acting like it.
