An initiative was successfully circulated by the California Forward Action Fund titled the Government Performance and Accountability Act. This was, and is, an expensive effort that should have never needed to be brought to a popular vote. But it must. It is a citizen's initiative that fixes a problem that government has been unable to address. Why did it come to this?
Last year state Sen. Lois Wolk, D-Davis, sponsored Senate Bill 14, which would have mandated state agencies to develop performance measures through which the Legislature and administration could gauge the effectiveness of government programs. It passed both houses of the Legislature unanimously. Little of real substance passes the California Legislature unanimously. But this bill did because it was a common-sense approach aimed at fixing a serious problem the inability to see real information reflecting how departments of state government are performing.
Gov. Jerry Brown vetoed the measure. In his veto message he contended that it would place an unfair and costly burden on smaller departments. Costly to have measures of performance? Why was it really vetoed? Let's back up and look at the history of this issue before getting to the answer.
In response to the early 1990s recession, Gov. Pete Wilson initiated a series of reforms including piloting performance-based budgeting. The idea behind performance-based budgeting was for departments to set goals and measures of performance, and then allocate the funds needed to meet them. Instead of starting with the previous year's budget and adding to it, stakeholders and the public would be able to see exactly what was being accomplished, and reduce or increase funding based on those accomplishments or lack thereof. Each pilot department was to develop its own methodology. The Department of Finance was to be the coordinating agency for the pilot agencies, but it provided little direction to the individual departments.
By 1997, one pilot department, the Department of Parks and Recreation, had made such significant strides in its work on performance budgeting and performance management that it was recognized as "best in class" in government by the nonprofit California Council for Excellence. By 1998 State Parks notified the Department of Finance that it was "poised for full implementation of PBB pending policy decisions by the administration."
In 1999, the pilot was discontinued. Why? The reality was that there were too many vested interests in the budget system, especially the Department of Finance.
In 1994, the State Government Strategic Planning and Performance Review Act was enacted. It requires all departments to develop strategic plans to be used for effective performance reviews. In addition, the act required, and still technically requires, the Finance Department to survey agencies annually regarding the status of their plans.
To say the act is universally ignored would be an understatement. Few agencies have any plans linked to actual measured performance, and the Finance Department has no universal guidelines for departments to follow. Ask the Finance Department how it monitors agency strategic plans to meet the mandate originally cited in the legislation and I am confident you will get blank stares.
In 2004, Gov. Arnold Schwarzenegger established the California Performance Review to make recommendations to reform state government. The panel's final recommendations included transforming the state's strategic planning process and implementing a performance-based management system, including performance-based budgeting. Public hearings were held throughout the state to gather input on the recommendations. No negative comments were submitted regarding the performance management recommendations. None.
A performance review management implementation team met with the Finance Department under the progressive director of finance, Donna Arduin. Arduin supported the recommendations and believed every state program should have clear measures to help the public determine whether agencies' goals have been met. Unfortunately, Arduin resigned and traditional Finance Department leadership again took over, ending any movement toward performance-based budgeting and management.
Fast-forward to Brown's recent veto of Wolk's SB 14. You can bet that if the Department of Finance did not actually write the veto message, at minimum finance officials prepared the arguments against the bill.
In his veto message, the governor did commit to issuing an executive order to incorporate program evaluation methods for better budgeting. That executive order directed, yes you probably guessed by now, the Department of Finance to create a plan for modifying the budget process. That plan was ordered to be put in place within 90 days, a timeline that has long passed.
That's why it came to this.