Below is the HillCo client report formt he September 4 House Appropriations Committee hearing.
The committee met to discuss the Strategic Fiscal Review directive given to the Committee by the Speaker of the House.
Chair Jim Pitts opening remarks:
- Introduced new staff and staff changes
- Began discussion of Strategic Fiscal Review charge
- Currently Texas uses hybrid model of budgeting
- Will take more detailed look in this process and see what it cost government to perform an obvious function
- Evaluate programs that don’t often get much attention during session
- It is not often asked if program is filling a need or is necessary – this review will provide insight
- Agencies represent a full cross section of budget
- Subcommittees will hold hearings leading up to next session
Ursula Parks, Legislative Budget Board
- Benefits hoping to see include but not limited to: mechanism to allow evaluations, look at ROI, maybe more investment would have huge return or the inverse of that, etc
- Agency list provided to committee: Trusteed Programs within the Office of the Governor; Department of Information Resources; General Revenue-funded programs at the Department of Assistive and Rehabilitative Services; Higher Education Coordinating Board; System Offices of General Academic Institutions; Available University Fund; Texas State Law Library; Juvenile Justice Department; Department of Public Safety; Department of Transportation; and the Public Utility Commission
- Conversation with Senate and Speakers office provided list – trying to get across articles and spectrum (Lt. Gov and Sen. Nelson added one agency)
- Thinks it is important to have a broad cross section and this list represents 20% of state All Funds budget
- Process was developed in house
- Extensive template for data collection developed and training will be provided to agencies so they understand the process
- Will use LBB database of agency programs as starting point
- Agencies may further break apart into smaller component pieces
- Time scope of data being requested – first year program was implemented and for FY 2010-2017 (this is all funds exercise so stimulus funding may get picked up in the process, etc)
- Asking agency activity to be broken into individual components – capture all component parts
- Goal is to answer what an agency actually does to administer program
- Will be also focusing on outsourcing services
- Will provide information on alternative funding options
- Data collection begins over next few weeks and analysis will follow and run through November
- Subcommittees can start meeting now said Rep. Pitts
- Robust and detailed analysis should be available during legislative session
- Reviewed different budgeting methods – performance measurement is a guide but there are some parts that are program based, etc
- Texas does have a hybrid system
- Leading up to 2011 session an extensive internal project at the LBB looked at discretionary programs – things truly optional
- Have done various types of reviews and cuts before (deferrals were used in 2003 not as many agencies in 2011, consolidation in Article II in 2003, revenue enhancements in 2003,etc) used similar tools across the sessions
- Overall budget process in 2003 used targeted funding approach
- 2011 budget process looked at discretionary spending of agencies
- Will provide to committee budgeting actions taken in 2003 and 2011
- Rep. Giddings discussed getting into “weeds” of the agencies/programs will situations become more apparent (used B on Time “pot of money” funding example)
- Yes said Parks
- Awareness of funds is Giddings hope for the process as well and would like Parks to ensure they capture certain details
- Parks said All Funds process does give comprehensive look and this process affords the opportunity for everything to brought to light in these agencies
- Giddings again goes back to this issue and asked about the LBB possibly providing fund balances
- Parks noted some things can be highlighted
- Zero-based budgeting discussion
- Parks said 2003 and 2011 drew on principals of zero-based budgeting and some of those elements were used during the last session but zero-based can be defined differently
- Pure zero-based budgeting can be enormously time consuming, said Parks, and not necessarily lead to a different outcome
- But not just one method recommended – Texas can use the tools they need
- Rep. Howard inquired about effectiveness of consolidation and if desired goal was achieved
- Parks said Sunset review just conducted may help give insight
- Howard said trend lines are helpful when looking at method of finance and asked if LBB can get that flavor in report they are working on
- Parks believes they can and thinks taking long enough period to start seeing the trend
- Rep. Zerwas inquired about synchronicity of this type of Fiscal Review with Sunset – should be before the Sunset, right after, during?
- Parks said would be hesitantly to do this in-depth analysis concurrently as it could be overwhelming for the agencies but there is some benefit to see how Sunset recommendations settle out
- Rep. Otto asked if State Auditor reports will be included in LBB report
- Yes, said Parks, including third party reviews, Sunset, etc
- Rep. King asked how this report will work in conjunction with the GEER report
- GEER report recommendations were started a long time ago so two different reports