State Budget Fix Begins at "Zero" 

By Assemblyman Bob Huff 

California faces a $16 billion deficit this year and there is a lot of noise on how to fix it. Some have suggested eliminating the 2/3 threshold for passing taxes and eliminating Proposition 13. This is an unworkable, irresponsible solution to a problem of overspending in Sacramento. I believe a significant part of the answer to our budget woes lies in the methodology state departments currently employ in determining their expenditures for the next fiscal year. 

The traditional way in which state agencies create their annual budget by adding amounts to their current expenditure level is a flawed approach. This method assumes the current year's expenditure level is justifiable, when in fact the level may be too high or too low. It is never clear what level is justifiable using this traditional budgeting method. However, one thing is clear:   The present system gives an incentive to spend all that is budgeted to justify, at a minimum, the same level as a base for the next year, even if the money was wasted. 

This year, I introduced legislation to help fix this problem. AB 1838 would designate certain state departments to implement a zero-based budgeting method. This program would act as a launching pad to move all California departments toward a responsible budgeting strategy. Zero-based budgeting is a financial management strategy to help policy makers achieve a more cost-effective delivery of public services. Under zero-based budgeting, an agency's budget starts at zero and adds the dollar amount the agency needs to carry out its operations and duties. It also includes an itemized justification for the amount requested to perform each activity and asks questions such as "What would happen if X Program were not provided at all?" or "Are there other less costly and more effective ways to achieving these objectives?" 

Through this type of budgeting, state departments can conduct a detailed and concentrated study of activities that may be ineffective or costly and look at alternatives to correct inefficiencies. We can take a fresh look at which programs and departments are being over funded or under funded. 

Another important thing zero-based budgeting does is to help root out government waste, fraud and abuse. Time and time again, examples of taxpayer funds being spent unwisely or illicitly come to light. However, these examples are usually cited by newspapers or outside taxpayer advocate groups. The scrutiny of zero-based budgeting forces government waste to be identified and discarded before it can be wasted. 

AB 1838 is supported by the Howard Jarvis Taxpayers Association and is awaiting a hearing before the Assembly Budget Committee. Perhaps with our daunting budget problems, this will be the year my colleagues realize business as usual isn't working, and it is time for reforms like zero-based budgeting.