The Facts

* The current strategic and planning-based budgeting system, which links appropriations to strategies and goals rather than programs, obscures how government agencies are spending money and why.

* The LBB increased budget transparency by developing an online application offering program-specific budget details.

* House Bill 98, proposed during the 83rd Regular Session, would have moved the state to zero-based budgeting by requiring one-third of all state agencies to undergo a zero-based budgeting process before the start of each legislative session. However, the bill was unsuccessful.

* Zero-based budgeting results in a more thorough analysis of the entire budget, rather than just considering the amount of spending above or below the baseline, making it time-consuming for both lawmakers and budget administrators. However, the method holds enormous promise as demonstrated in 2003 when state lawmakers, faced with a $10 billion budget shortfall, balanced the state budget without a tax increase.


* The Legislature should move from strategic planning and budgeting system to a program-based budgeting system. This will allow the budget layout to be more intelligible for legislators and taxpayers, making it easier for all to understand how state money is spent and for what purpose.

* The Legislature should adopt zero-based budgeting to ensure taxpayers get the most value of the programs and departments they fund.

* Because zero-based budgeting is more difficult than traditional budgeting, it is hard to sustain; therefore, lawmakers may want to consider applying this comprehensive tool to about one-third of the budget every biennium. For example, education in one session, health and welfare in the next, and then all other budget items.