Where Does It All Go?

Where Does It All Go?

The Fiscal Year 2018 State of Arizona Budget totals over $9.86 Billion and taxpayers are funding a lot of priorities.  The highest among them is Education.

Budget Basics

Each year, the Joint Legislative Budget Committee Staff publishes an Appropriations Report, which includes summary information on the most recently enacted budget and agency-by-agency details.  The Report reads like a book including both numbers and descriptions of what the Legislature intends to see happen with the appropriations that are authorized on behalf of the Taxpayers.  In this book, you will find a summary section that includes a brief narrative description of the budget’s contents, along with graphs which provide an overview of spending for the state’s major agencies.  The Staff also includes a 10-year comparison between the budgets in FY 2008 and FY 2018.
For each agency, there is a description of line items and the reasons for changes between the FY 2017 and FY 2018 budgets.
The Budget Report can be viewed by clicking the link FY 2018 Appropriations Report.

Budget Reasoning

In the past, State government -much like the Federal government- has focused on prior appropriation patterns.  Often the focus of this approach is, “We have these many dollars, what can we spend it all on?”  In good economic times, and when tax rates have been higher than today, taxpayer dollars were plentiful and programs that probably should not have been funded with them received taxpayer support.

When challenging economic times hit Arizona -particularly between the years 2009 to 2015- the State Legislature became more realistic about prioritization of programs and began down the path toward Zero Based Budgeting.  We are not there yet, but with Proposition 108 and regular constituent feedback, lawmakers are often reminded that there must be a balance struck between priorities and resources.

Simply said, Zero Based Budgeting starts every year with every agency set at $0.00 funding.  The justification case for agency spending is made, often supported by evidence that the services offered are in demand, or address a priority that the State branches of government have set.  Each agency or department receives funding out of what is called, “the box”.

Economist Jonathan Williams hits the nail on the head writing,

“A budget drives all policy within a state. For this reason,
debating, writing, and approving a state budget are the
primary tasks legislators must accomplish. However, when
budgets are built in the traditional manner of adjusting
the current budget for inflation and caseload increases,
legislators become “enablers” for agencies and programs
that likely have fundamental design flaws or that may be
providing services that are ineffective at meeting legislative
goals. This type of approach focuses almost entirely on
inputs (more money). Building budgets the conventional
way virtually assures overspending since there is little, if
any, focus on efficiency, effectiveness, or outcomes.”

The budget should not drive policy, policy should be driving the budget, and that is how we achieve accountability back to the Taxpayers.

Priority Based Budgeting

The government was never intended to solve every challenge presented in life, yet because the Legislature is made up of people, and people care, we try to act on more priorities than we have resources to address.  Priority Based Budgeting is a different approach where we define our highest to lowest priorities.  Public safety (fire, police & courts), education (K-12 & universities), infrastructure (roads, wires and water).

Priority-based budgeting means elected representatives, state officials and citizens must first determine the core functions of government. While this may seem like an elementary step, it is seldom taken before legislative appropriations are made. Gaining control of a state budget means the following questions must be answered:

  • What is the role of government?
  • What are the essential services government must provide to fulfill its purpose?
  • How will we know if the government is doing a good job?
  • What should all of this cost?
  • When cuts must be made, how will they be properly prioritized?

“Only by carefully considering the proper role of government can legislators and governors do an effective job protecting individual rights while providing essential services to taxpayers in an efficient, cost-effective manner.  This is not an “anti-government” philosophy; rather it is ensuring that what government is supposed to do, it will do well.”  (Williams 2017)

Special thanks go to Economist Jonathan Williams for his guidance and contribution to this opening conversation on how we serve better.

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