*First appeared in the October 1, 2014 edition of the Laurel Chronicle
Most Mississippians don’t follow the legislative budgeting process. It’s a bit wonky and not often described in a relatable way. I’ll try to remedy that in this column by demonstrating how budgeting is a lot like the courting process – the ups and downs, the thrills and chills, and the building of an institution (be it marriage or state government).
There are no storks and no pastel-colored ribbons involved in the making of a state budget, but the process required for smooth budgeting is not entirely dissimilar to the process of making a family.
We’ll start at the beginning: Speed dating. This process occurs each year during the Joint Legislative Budget Committee budget hearings. Instead of a bar, state agencies are herded into a room at the Woolfolk Building where they have about 15 minutes to dazzle the members of the JLBC. Agencies talk about what they like; budget committee members talk about what they don’t like. Then, if the agency is lucky, they’ll get matched. This could be a general agreement among JLBC members that the agency needs a budget increase or simply one legislator who decides to champion their cause.
In fact, budget speed dating began this week. By the time you’re reading this, agencies like the Dept. of Education, Dept. of Corrections, and State Board of Health have already made a pass at next year’s budget. (Don’t worry though – agencies will get their full vetting during the actual legislative session. This is just a warm-up.)
After the weeklong speed dates subside, the JLBC members must reconvene to determine which agency they’d like to take to the dance, a.k.a. the “legislative budget recommendation.” Who will lawmakers invite to dance with them? Will they choose to fund the budget increase requested by certain departments? And so forth. “Priority agencies” always find their way into the legislative budget recommendation, but priority is often in the eye of the beholder, er, lawmaker.
So we’ve done speed dating, and we’ve slow-danced at homecoming. What’s next?
In January, lawmakers officially reconvene to start working on the nuts-and-bolts of a budget. This is the DTR phase – or, “define the relationship” for those of you not keeping track with adolescent lingo.
In defining the relationship, lawmakers will revisit issues again and again and again (sounds like a relationship, doesn’t it?). Why do you need this budget increase? Where are we going with this program? What are your long-term goals? Why can’t we trust your agency? Are you the kind of agency I can take home to mom – or at least to the floor of the Senate?
Making it through the DTR phase is difficult but manageable. And, if your agency is lucky enough to navigate this process, you’ve made it past one of the hardest parts.
Marriage comes next, and that’s when lawmakers of both chambers agree to fund a particular agency or program. Budget leaders of both houses must give the verbal “I do” before a final budget can be adopted.
Yet a marriage (or, in this case, a general agreement) isn’t the final step in this family-making ordeal. This last part is the most mysterious and least understood of budgeting processes. It’s called “conference” and, like the birthing process, it entails a lot of false starts, sweat, a little pain, and ultimately a bundle of joy (a finished budget!).
From budget hearings to conference reports, the budgeting process is arduous, complicated, and altogether wonky. But it determines how your taxpayer dollars are used, and that’s why all of us have an interest in understanding these courtship-like processes.
Showing posts with label Budget Hearings. Show all posts
Showing posts with label Budget Hearings. Show all posts
Wednesday, October 1, 2014
Thursday, September 19, 2013
More money for education should require less money for administration
*First appeared in the September 19, 2013, edition of the Laurel Chronicle.
Legislative budget hearings are nearly complete. By the time you read this column, legislators will have already endured hours of hearings in which agencies ask for more of your tax dollars to pay for things like increased salaries and wireless radios.
Nonetheless, the biggest slice of the state's budgetary pie will go to education, specifically K-12. Within education, the largest line-item is the Mississippi Adequate Education Program, known by most as "MAEP." Around the State Capitol, MAEP has become something of a four-letter word (see what I did there?).
When the MAEP was adopted, it was heralded as a magic formula that would, based on district measures like student population and free or reduced lunches, spit out the amount of money needed to "adequately" fund schools. So then, what's the problem?
Some say the formula is bogus and should be revamped. Others note the Legislature rarely funds MAEP at its required amount. Some say we must ensure the accuracy of the data that's being used as part of the calculation, and yet another school of thought insists we keep the formula but recalculate it on a more regular basis.
On the MAEP spectrum, I think I fall into the category labeled "yes."
Yes, let's look at the formula and make changes if necessary. But let's not forget that study of education funding should run simultaneous to study of educational efficiencies. After all, the money we can save through efficiencies is money we can steer back to the classroom.
Recognizing the serious budget pressures faced by school districts, the Legislature has already taken steps to reduce administrative costs. Under the leadership of Lt. Gov. Tate Reeves and Senate Education Chairman Gray Tollison, Clay County and West Point school districts were merged to achieve efficiency without reducing educational quality.
Clay County, a K-6 school that had its own school district and superintendent, spent $16,795.38 per student in 2011-2012 - the highest in the state. Its consolidation with West Point along with the other six administrative consolidations implemented by this Legislature will save taxpayers millions of dollars that can be re-directed to the classroom.
Mississippi ranks ninth per capita on administrative costs, which means we must do even more to reduce spending. An aggressive shared services strategy focused on areas like transportation, purchasing, and technology could result in dramatic savings.
A Deloitte study looked more comprehensively at the issue, finding that shifting a quarter of the nation's school district tax dollars spent on non-instructional operations to shared services would save up to $9 billion. That's significantly larger than Mississippi's general fund budget and the equivalent of 900 new schools or more than 150,000 new school teachers.
The report notes a Canadian example where two school boards shared bus transportation across district lines, saving $8 million in three years. New Jersey's Middlesex County municipalities have saved five percent on electricity for public buildings through aggregate natural gas purchases.
In Pennsylvania, two school districts entered into an agreement to share the services of a food service director. After the first year, the program netted a profit of $100,000 compared to the previous year which had a combined $20,000 loss. The combined volume had increased the districts' purchasing power, thus reducing food costs.
I took great interest in the report's note about the California Charter Schools Association, which created a Joint Powers Authority to save members money on mandatory costs, such as worker's compensation insurance. The typical charter school over $20,000 per year on this expenditure.
In addition, the CCSA created "CharterBuy" - a program that taps into charter schools' collective buying power to provide them with the best deals on supplies and equipment. The CharterBuy program has saved as much as 50 percent on expected costs in these areas.
Shared services isn't a new concept and has been embraced across the country by both the private and public sectors. With a top ten listing in administrative costs, Mississippi can't afford to focus on increasing education spending without an equally serious focus on reducing money spent outside the classroom.
Legislative budget hearings are nearly complete. By the time you read this column, legislators will have already endured hours of hearings in which agencies ask for more of your tax dollars to pay for things like increased salaries and wireless radios.
Nonetheless, the biggest slice of the state's budgetary pie will go to education, specifically K-12. Within education, the largest line-item is the Mississippi Adequate Education Program, known by most as "MAEP." Around the State Capitol, MAEP has become something of a four-letter word (see what I did there?).
When the MAEP was adopted, it was heralded as a magic formula that would, based on district measures like student population and free or reduced lunches, spit out the amount of money needed to "adequately" fund schools. So then, what's the problem?
Some say the formula is bogus and should be revamped. Others note the Legislature rarely funds MAEP at its required amount. Some say we must ensure the accuracy of the data that's being used as part of the calculation, and yet another school of thought insists we keep the formula but recalculate it on a more regular basis.
On the MAEP spectrum, I think I fall into the category labeled "yes."
Yes, let's look at the formula and make changes if necessary. But let's not forget that study of education funding should run simultaneous to study of educational efficiencies. After all, the money we can save through efficiencies is money we can steer back to the classroom.
Recognizing the serious budget pressures faced by school districts, the Legislature has already taken steps to reduce administrative costs. Under the leadership of Lt. Gov. Tate Reeves and Senate Education Chairman Gray Tollison, Clay County and West Point school districts were merged to achieve efficiency without reducing educational quality.
Clay County, a K-6 school that had its own school district and superintendent, spent $16,795.38 per student in 2011-2012 - the highest in the state. Its consolidation with West Point along with the other six administrative consolidations implemented by this Legislature will save taxpayers millions of dollars that can be re-directed to the classroom.
Mississippi ranks ninth per capita on administrative costs, which means we must do even more to reduce spending. An aggressive shared services strategy focused on areas like transportation, purchasing, and technology could result in dramatic savings.
A Deloitte study looked more comprehensively at the issue, finding that shifting a quarter of the nation's school district tax dollars spent on non-instructional operations to shared services would save up to $9 billion. That's significantly larger than Mississippi's general fund budget and the equivalent of 900 new schools or more than 150,000 new school teachers.
The report notes a Canadian example where two school boards shared bus transportation across district lines, saving $8 million in three years. New Jersey's Middlesex County municipalities have saved five percent on electricity for public buildings through aggregate natural gas purchases.
In Pennsylvania, two school districts entered into an agreement to share the services of a food service director. After the first year, the program netted a profit of $100,000 compared to the previous year which had a combined $20,000 loss. The combined volume had increased the districts' purchasing power, thus reducing food costs.
I took great interest in the report's note about the California Charter Schools Association, which created a Joint Powers Authority to save members money on mandatory costs, such as worker's compensation insurance. The typical charter school over $20,000 per year on this expenditure.
In addition, the CCSA created "CharterBuy" - a program that taps into charter schools' collective buying power to provide them with the best deals on supplies and equipment. The CharterBuy program has saved as much as 50 percent on expected costs in these areas.
Shared services isn't a new concept and has been embraced across the country by both the private and public sectors. With a top ten listing in administrative costs, Mississippi can't afford to focus on increasing education spending without an equally serious focus on reducing money spent outside the classroom.
Thursday, September 12, 2013
Budget hearings give glimpse of priorities, challenges faced by Legislature
*First appeared in the Sept. 12, 2013, edition of the Laurel Chronicle.
It's almost that time again. You know, the thing that only comes once a year. I'm not talking about Christmas; I'm talking about legislative budget hearings.
Starting Monday of next week, the Joint Legislative Budget Committee - known as the JLBC - will meet with select state agencies and commissions to hear about their needs, wants, and everything in-between…as long as it relates to money, of course.
And frankly, what doesn’t cost money these days?
Budget hearings may not sound very exciting. The truth is, they’re not. Agency presentations are focused on current spending, projected expenses, and specific budgetary line-items. Not exactly riveting material. But the staff of the Legislative Budget Office (LBO, pronounced “elbow”); lobbyists; researchers; journalists; and just plain old budget hacks like me lap this stuff up.
Hearings start off with an aggressive schedule: First, as usual, there will be an update from the State Personnel Board's executive director who will give lawmakers a briefing on state government employee trends, including demographic breakdowns and salary information.
Following this presentation, members of the JLBC will hear from multiple agencies, including five of which are headed by statewide elected officials (Depts. of Agriculture and Commerce; Treasury; Secretary of State; Attorney General; and Insurance Commission). In times past, these presentations had the potential to get a little testy, as statewide elected officials are not only agency managers but subject to the whims of Mississippi's electorate.
I expect the usual suspects to garner the most attention during these hearings. Major budgets like the Dept. of Education, Institutions of Higher Learning (the agency representing universities), State Community College Board, and Medicaid typically receive the most scrutiny. Together, these agencies account for roughly 70 percent of the state’s general fund budget.
As with every budget hearing cycle, however, other “budgets du jour” exist. For example, the State Dept. of Transportation has the potential to get tense, given the recent calls for increased gasoline taxes and subsequent calls for increased accountability of MDOT spending. It will be interesting to see how much more taxpayer funding, if any, the Public Employees’ Retirement System (PERS) is asking lawmakers to put into the pension plan. Another budget to watch is the Wireless Communication Commission, which was mandated by the Legislature to develop a long-term funding strategy.
Almost as a prelude to budget hearings, the Washington Post’s “GovBeat” blog this week featured a story on Mississippi’s Department of Revenue collecting a significant amount of back taxes – turning an extra $3.5 million appropriation from the Legislature into $80 million.
“By virtually any standard, a nearly 23-fold return on an investment in a year is really good. It’s so good, in fact, that it’s almost unbelievable. But in Mississippi that’s exactly what legislators got” when they gave DOR an extra $3.5 million to hire auditors and collection agents to target the state’s tax gap.
Of course, the increased revenue is attributable to more than additional manpower, but the new boots on the ground certainly helped those taxes find their way back to the state’s bank account.
Speaking of more money than we thought, I should remind you that Mississippi’s most recently completed fiscal year (Fiscal Year 2013) brought in millions more revenue than legislators expected. The current fiscal year which began in July (Fiscal Year 2014) is exceeding financial expectations, though it’s too early to tell if higher collections will continue.
As I’ve written before, higher-than-expected revenue is both a blessing (more money to spend on priorities) and a curse (more pressure to fund agencies and special interest projects) for state lawmakers.
While it’s unclear how legislative leaders will appropriate these extra dollars, one thing is certain: State agencies, lobbyists, special interest groups, and other capitol players will know just how much extra money there is to be spent, and they won’t take their eyes off the monetary prize (which kind of reminds you of that commercial featuring the eyes on the stack of dollars, right?).
The budget hearings only come once a year and officially mark the beginning of the new budget season. They truly are like Christmas to Mississippi’s budget nerds. Merry Hearings, y’all!
NOTE: For a full schedule of the budget hearings, visit www.lbo.ms.gov.
It's almost that time again. You know, the thing that only comes once a year. I'm not talking about Christmas; I'm talking about legislative budget hearings.
Starting Monday of next week, the Joint Legislative Budget Committee - known as the JLBC - will meet with select state agencies and commissions to hear about their needs, wants, and everything in-between…as long as it relates to money, of course.
And frankly, what doesn’t cost money these days?
Budget hearings may not sound very exciting. The truth is, they’re not. Agency presentations are focused on current spending, projected expenses, and specific budgetary line-items. Not exactly riveting material. But the staff of the Legislative Budget Office (LBO, pronounced “elbow”); lobbyists; researchers; journalists; and just plain old budget hacks like me lap this stuff up.
Hearings start off with an aggressive schedule: First, as usual, there will be an update from the State Personnel Board's executive director who will give lawmakers a briefing on state government employee trends, including demographic breakdowns and salary information.
Following this presentation, members of the JLBC will hear from multiple agencies, including five of which are headed by statewide elected officials (Depts. of Agriculture and Commerce; Treasury; Secretary of State; Attorney General; and Insurance Commission). In times past, these presentations had the potential to get a little testy, as statewide elected officials are not only agency managers but subject to the whims of Mississippi's electorate.
I expect the usual suspects to garner the most attention during these hearings. Major budgets like the Dept. of Education, Institutions of Higher Learning (the agency representing universities), State Community College Board, and Medicaid typically receive the most scrutiny. Together, these agencies account for roughly 70 percent of the state’s general fund budget.
As with every budget hearing cycle, however, other “budgets du jour” exist. For example, the State Dept. of Transportation has the potential to get tense, given the recent calls for increased gasoline taxes and subsequent calls for increased accountability of MDOT spending. It will be interesting to see how much more taxpayer funding, if any, the Public Employees’ Retirement System (PERS) is asking lawmakers to put into the pension plan. Another budget to watch is the Wireless Communication Commission, which was mandated by the Legislature to develop a long-term funding strategy.
Almost as a prelude to budget hearings, the Washington Post’s “GovBeat” blog this week featured a story on Mississippi’s Department of Revenue collecting a significant amount of back taxes – turning an extra $3.5 million appropriation from the Legislature into $80 million.
“By virtually any standard, a nearly 23-fold return on an investment in a year is really good. It’s so good, in fact, that it’s almost unbelievable. But in Mississippi that’s exactly what legislators got” when they gave DOR an extra $3.5 million to hire auditors and collection agents to target the state’s tax gap.
Of course, the increased revenue is attributable to more than additional manpower, but the new boots on the ground certainly helped those taxes find their way back to the state’s bank account.
Speaking of more money than we thought, I should remind you that Mississippi’s most recently completed fiscal year (Fiscal Year 2013) brought in millions more revenue than legislators expected. The current fiscal year which began in July (Fiscal Year 2014) is exceeding financial expectations, though it’s too early to tell if higher collections will continue.
As I’ve written before, higher-than-expected revenue is both a blessing (more money to spend on priorities) and a curse (more pressure to fund agencies and special interest projects) for state lawmakers.
While it’s unclear how legislative leaders will appropriate these extra dollars, one thing is certain: State agencies, lobbyists, special interest groups, and other capitol players will know just how much extra money there is to be spent, and they won’t take their eyes off the monetary prize (which kind of reminds you of that commercial featuring the eyes on the stack of dollars, right?).
The budget hearings only come once a year and officially mark the beginning of the new budget season. They truly are like Christmas to Mississippi’s budget nerds. Merry Hearings, y’all!
NOTE: For a full schedule of the budget hearings, visit www.lbo.ms.gov.
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