You asked (1) whether any Connecticut municipalities have adopted performance-based budgeting (PBB) and (2) whether there are any resources for a municipality considering this system.

SUMMARY

It appears that no Connecticut municipality has implemented PBB to date, although Stamford and West Hartford are considering doing so. PBB goes beyond traditional line item budgeting by tying proposed expenditures to actual accomplishments. There are a wide range of resources for municipalities considering this system, including Websites, publications, and organizations in Connecticut and elsewhere.

PERFORMANCE BASED BUDGETING

PBB relates spending to accomplishments. Historically, most governments have adopted line item budgets, which specify spending on inputs such as personnel and supplies. In preparing these budgets, governments often governments assume that funding for existing programs will continue at about the same level as in the past, with adjustments for inflation and the anticipated number of program beneficiaries (i. e. , incremental budgeting). Critics have claimed that line item budgets do not allow decision makers to determine the extent to which agencies are actually accomplishing their missions.

Performance-based budgeting involves a multi-step process to address this criticism. In this approach, agencies are encouraged to develop strategic plans of what they intend to accomplish, including specific objectives. Based on these plans, agencies develop measures of how well they are meeting their objectives. For example, a health agency could use infant mortality rates as an indicator of how well it is promoting maternal health. The measures can consider the agency's activities (e. g. , the number of patients seen in a clinic), its efficiency (e. g. , the cost per inoculation per child), and outcomes (e. g. , the incidence rate of a particular disease). The agency's budget is then tied to the resources it needs to meet its objectives as measured by these indicators and its past performance. The performance measures can also be used for administrative purposes, such as staff allocation.

CONNECTICUT EXPERIENCE WITH PBB

Municipal

It appears that no Connecticut municipality has implemented PBB to date, but Stamford and West Hartford are in the very early stages of doing so. In Stamford, the proposed FY 2002-03 budget (available on-line at http: //www. ci. stamford. ct. us/OfficeOfPolicyAndManagement/PDF/2002-2003/0203ProposedOperatingBudget. pdf ) identifies performance measures in some areas, although these are not tied to appropriations. The city administration is working with the Board of Representatives to identify additional performance measures, according to Dena D'Orio, director of the city's Office of Policy and Management. The city is also beginning to collect performance data that could be used in the budgeting process. D'Orio notes that the process of determining goals, identifying performance measures, and collecting data in order to make decisions requires a substantial investment of staff time and other resources. She also believes that it requires the commitment of municipal officials. She believes that it would be worthwhile to incorporate the performance measures in municipal budgeting, but that this development will not occur for quite a while, if it occurs at all.

West Hartford has been moving towards PBB over the past few years and has developed performance measures for several agencies, including the police, fire, and public works departments, according to town manager Barry Fineman. He notes that it can be difficult to determine which data to collect and that the use of PBB raises concerns for municipal unions, particularly if the failure to accomplish goals is due to factors beyond the agency's control. At this time, Fineman believes that local decision-makers are not yet comfortable in making budgetary decisions based on PBB. Instead, the administration presents the performance measures as part of its information package in the budgeting process, but is not integrated in the budget itself.

State

In Connecticut, CGS Sec. 4-67m requires the Office of Policy and Management (OPM) to develop, for state budgeting purposes, specific goals and objectives and quantifiable outcome measures for each state agency's programs and service. OPM is required to file an annual report regarding the goals, objectives, and measures with the Appropriations Committee and with each agency's committee of cognizance. As discussed in OLR report 98-R-0391, several other states have adopted initiatives related to performance-based budgeting.

RESOURCES

There are many resources available regarding PBB. The International City/County Administration Association (ICMA) has a Center for Performance Measurement, which has published "What Works: Management Applications of Performance Measurement in Local Government. " Ordering information is available on ICMA's Website, http: //www. icma. org.

Several organizations have developed case studies of PBB and related measures. The Government Accounting Standards Board has published 12 performance measurement case studies, including six local governments, which are available on-line at http: //accounting. rutgers. edu/raw/seagov/pmg/casestudy/casesmain. html. The Reason Public Policy Institute's "Citizen Budget Report" has case studies from Philadelphia, Phoenix, San Diego, and San Jose. It is available on-line at http: //www. Reason Public Policy Institute . org/ps292. pdf. A Rutgers University Website, http: //accounting. rutgers. edu/raw/seagov/pmg/happening/index. html. describes municipal PBB initiatives. Another Rutgers Website, http: //accounting. rutgers. edu/raw/seagov/pmg/casestudy/casesmain. html, describes state and local performance measurement programs in areas such as elementary and secondary education, road maintenance, and parks.

In addition, several municipalities have published the results of their programs. San Diego publishes its "Service Efforts and Accomplishments" annually (available on-line at http: //www. sannet. gov/city-manager/service-efforts/). Austin has a published a progress report on implementing PBB, http: //www. ci. austin. tx. us/auditor/sup_pmr1. htm. Worchester, Massachusetts' report on its performance measurement efforts is available on-line at http: //www. wmrb. org/reports/Pioneer. html.

Locally, the Connecticut Policy and Economic Council is working with Stamford in developing its PBB system and has provided funds for a consultant. The staff person working on this project, Michelle Cunningham, can be reached at 860. 722. 2490.

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