Gov. Paul LePage came into office with a legislative majority and a full agenda of policy initiatives.

But he also was given only two months to draft a two-year budget that paid for state services, which would cost an additional $100 million to maintain in the next biennium.

The governor’s budget team put together a plan that fit the bill, and it was rewritten by legislators and became law. While there were significant changes, what they ended up with looked a lot like what they’d started with.

That is not necessarily a bad thing. We don’t want the size and scope of state government to careen from one extreme to another every time a different party comes into power. People who rely on government services, such as nursing home patients or school children and their families, should be able to count on the government to keep its promises from one year to the next.

But it’s not all good, either. When it comes to how programs are designed and organized, continuity can also mean stagnation. If all you do with the budget is add or cut depending on current revenues, there is little opportunity for creative thinking.

LePage and Finance Commissioner Sawin Millett offered a different approach this week, and it’s one worth exploring.

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It’s called zero-base budgeting, and it’s used by many businesses and some governments as a way to decide how to spend for the future without being enslaved by the past.

Each agency of state government will be asked to start from scratch, not the current budget, to decide how much it needs to meet its goals.

The idea is that such a process will help identify ineffective programs and procedures, finding ways to be more effective. It also could cut costs, but that is not necessarily the goal of this kind of budgeting. At the very least, it forces people to think about expenditures that have been made automatically in the past.

This is not only the right exercise, it is the right time to do it. Although some zero-base budget ideas could influence the expected supplemental budget that will have to be drafted next year as a mid-course correction, the real value will be evident when the next biennial budget is created in 2013.

That will be the opportunity to introduce deeper reforms than those that were available to the new administration and Legislature that took office in January.

That said, there are ways in which state government is not like a business and in which it has less flexibility to change. Just under half of state spending goes to education, with almost none of it spent by the Department of Education.

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Every year, state funds are sent to local school districts that set their own budgets and are approved by local vote.

The same is true for much of the Department of Health and Human Services budget, which makes up almost 30 percent of state spending. Much of it is distributed to thousands of providers who contract with the state to deliver services, from small community mental-health group homes to giant hospitals. Their budgets are not written by state officials, and how efficient these operations are is largely up to them.

But none of that is an argument against state officials rethinking the spending that they do control. Saying that the current-year budget should always be the basis for the one that follows is like saying that state government is fine the way it is.

Every organization can improve, and if zero-base budgeting is a way to improve the efficiency of state government, it is a worthwhile exercise.

This is not only the right exercise, it is the right time to do it. Although some zero-base budget ideas could influence the expected supplemental budget that will have to be drafted next year as a mid-course correction, the real value will be evident when the next biennial budget is created in 2013. That will be the opportunity to introduce deeper reforms than those that were available to the new administration and Legislature that took office in January.

 


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