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Performance Budgeting and Results First – creating a strong state accountability system

Gary VanLandinghamDirector, Results First

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The Pew Center on the States

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The national picture

• Most states have some type of budgeting for results system– 33 have broad statutes mandating

performance/results systems – Three enacted new performance/results laws

in 2010– Some have also created systems through

executive action without statutory mandate

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Objectives of state systems• Measure and report programs

accomplishments

• Compare successes and costs so that best and worst performing programs can be identified

• Consider information in budget and policy decisions; cut poorly performing programs and direct funds to those with best return on investment

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Success has been mixed

• Many have developed reasonably strong performance reporting systems

– Typically require agencies to report output and outcome measures

• States have struggled to use performance information in the budget process

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Lessons learned• It takes time to develop good performance

reporting/budget systems

• Data quality is important– need quality assurance checks on measures

• Strong leadership is essential, ideally from both the governor and legislature

• Measures must be useful for agencies, governor and legislature

– Different measures reported to each level

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Measures should be layered

POLICY(Vision)

PROGRAM(Key

interventions)

TASKS (Frontline activities)

Bot

tom

Mea

sure

s Fe

ed

into

Top

Mea

sure

s

Measurem

ent Detail

Increases from Top to

Bottom

Policy measures assess whether overall goals are achieved - report to policymakers

Program measures assess whether key strategies are successful - report to executive management

Task measures assess lower-level activities – reported within agency

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Lessons learned (cont’d)

• Systems can help drive agency performance, if they take it seriously

– Process of developing measures focuses attention on what agencies are trying to accomplish

• Communication is critical – results should be reported via graphics and show trends(spreadsheets are deadly)

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Lessons learned (cont’d)

• Need to keep expectations reasonable – measures inform budget and policy choices, but politics still happens

• It is hard to link results to funding (state accounting systems typically don’t track unit costs)

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Cost benefit analysis could help

• Cutting-edge cost-benefit analysis models are now available that analyze key policy areas

• Enables states to analyze a wide range of policy choices and identify options that improve outcomes AND reduce costs

• The models can be incorporated into budgeting for results system to help link outcomes to funding

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Approach in a nutshell 1. Aggregate best national research to identify

evidence-based programs that work

2. Apply research estimates of program impact to state population

3. Use state fiscal data to estimate total costs and benefits for each program

4. Predict return on investment for both individual programs and portfolios

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Change In Crime

Benefits less costs,per-person, life cycle (Probability: you lose $)

Adult Drug Courts -9% $6,264 (<1%) Prison Education -8% $13,555 (<1%)

Cognitive-Behavioral Treatment-7% $12,037 (<1%)

IST: surveillance -2% -$2,174 (≈82%) ISP: treatment -18% $15,079 (≈11%)

Multisystemic Therapy -13% $18,120 (<1%) Aggression Replacement -9% $15,257 (<1%)

Adult Offenders

Juvenile Offenders

Pre-School* (low income) -17% $+++* (n/a) Nurse Family Partnership* -16% $+++* (n/a)

Prevention*

Functional Family Therapy -18% $32,021 (<1%)

Drug Treatment in Prison -6% $9,588 (<1%)

Family Transitions -10% $29,721 (≈5%) Therapeutic Foster Care -18% $64,486 (<1%)

Example model outputs

* Programs have a number of other non-crime benefits; only crime-reduction reported here.

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Policy areas in models

• Criminal justice

• K-12 education

• Child welfare

• Substance abuse

• Mental health

• Health

• Public assistance

• Housing

• Teen birth

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Results First

• Provides models to state

• Trains staff in using cost-benefit analysis

• Provides technical assistance in getting the models up and running

• Helps interpret results for policy makers

• Compiles lessons learned and shares with participating states

• Periodically updates models