BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1020|
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THIRD READING
Bill No: SB 1020
Author: Wolk (D)
Amended: As introduced
Vote: 21
SENATE BUDGET & FISCAL REV. COMMITTEE : 10-0, 5/27/10
AYES: Ducheny, Dutton, Alquist, DeSaulnier, Huff, Leno,
Lowenthal, Liu, Padilla, Simitian
NO VOTE RECORDED: Ashburn, Cogdill, Harman, Negrete
McLeod, Wright
SUBJECT : State budget
SOURCE : California Forward
DIGEST : This bill provides a statutory framework for the
implementation of performance based budgeting and for a
systematic program performance review by the Legislature.
ANALYSIS : The California Constitution requires the
Governor to submit annually to the Legislature a budget
itemizing state expenditures and estimating state revenues
and requires the Legislature to pass the Budget Bill by
midnight on June 15. Under existing law, a state agency
for which an appropriation is made is generally required to
submit to the Department of Finance (DOF) for approval a
complete and detailed budget setting forth all proposed
expenditures and estimated revenues for the ensuing fiscal
year.
CONTINUED
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Specifics of SB 1020
Program Performance Review . This bill requires the
Legislature to establish a process for reviewing the
performance of all state programs at least once every 10
years, including tax expenditures. Six months prior to the
deadline for review of each program, a joint committee
shall refer the initial program review to the appropriate
policy committee of each house of the Legislature. A joint
committee shall propose legislation based on the policy
committee recommendations and other recommendations that
will reduce costs, improve outcomes, or terminate the
program. The proposed legislation of the joint committees
shall be submitted to the Rules Committee in each house and
referred to appropriate committees for public hearings and
further actions. This bill requires the proposed
legislation to be posted on the joint committee's website.
Performance Data in Budget Document . This bill requires
each state agency to submit performance data that reflect
desired outcomes for existing and proposed activities as
part of the annual budget submission. This bill also
requires each state agency to identify and update the
mission and goals of the agency, the activities and
programs focused on achieving those goals, performance
metrics, prior-year performance data, and proposed changes
in statute to improve outcomes or reduce costs. This data
shall be available on the Governor's Web site.
Development of a Performance-Based Budget . This bill
requires that performance based budgeting methods be
implemented for all budgets submitted to the Legislature by
the 2014-15 fiscal year. This bill requires the
Legislative Analyst's Office (LAO) to review the adequacy
of the performance metrics.
This bill creates a task force consisting of the DOF, the
State Controller's Office, and the chairpersons and vice
chairpersons of the budget committees that shall review and
comment on DOF's guidelines for developing
performance-based budgets, on DOF's training program to
ensure successful implementation of performance-based
budgets, and on DOF's plans for implementing
performance-based budgeting.
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The provisions of this bill are the same performance based
budgeting and program performance review provisions
contained in the larger package of reforms sponsored by
California Forward.
Background
Historic Budget Reform Efforts . There have been numerous
proposals to reform the budget over the past decades.
Historical reform efforts include, but are not limited to,
the following:
1. Pilot projects on performance budgeting in four state
departments starting in 1993 by then Governor Pete
Wilson.
2. Recommendations by the California Constitution Revision
Commission that convened from 1994 to 1996 at the
direction of statute and made various recommendations
regarding the state budget process and alignment of
programs between state and local governments.
3. Recommendations by the California Citizens Budget
Commission in 1998 that proposed statutory and
constitutional changes to the budget process, including
reducing the vote requirement for the state budget to a
majority vote.
4. Recommendations in the Governor's 2004 California
Performance Review regarding the state budget process,
including a recommendation to adopt a biennial budget
and a performance-based budgeting system.
California Forward Organization . California Forward has
sponsored the most recent efforts regarding government
reform. California Forward is an organization that was
created by California Common Cause, the Center for
Governmental Studies, the New California Network, and the
Commonwealth Club of California's Voices for Reform Project
in March 2008. The organization's main goal is to
contribute to improving the quality of life for all
Californians by creating a more responsive, representative,
and cost-effective government. This organization is funded
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by the following foundations: the California Endowment,
the Evelyn and Walter Haas Jr. Fund, the William and Flora
Hewlett Foundation, the James Irvine Foundation, and the
David and Lucile Packard Foundation.
In 2008, California Forward started a process of
consultation and engagement with the public and community
leaders regarding a government reform agenda. They have
made hundreds of presentations, consulted with hundreds of
community leaders, conducted focus groups and public
opinion research in the development of a reform agenda that
includes budget process reform and local government reform.
Performance-based budgeting and program performance review
are just two of the reforms proposed by California Forward.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
The Senate Budget and Fiscal Review Committee states that
this bill is likely to require new state spending in the
tens of millions of dollars annually to develop and
implement new performance standards. This includes
additional resources for the DOF and the LAO given their
expanded roles under this bill. In addition, new
information technology expenditures could result to address
the new requirements.
SUPPORT : (Verified 6/1/10)
California Forward (source)
American Council of Engineering Companies of California
California Association of Nonprofits
California Business Properties Association
California Chapter of the American Fence Association
California Construction and Industrial Materials
Association
California Fence Contractors' Association
California Forestry Association
California Grocers Association
California Independent Oil Marketers Association
California League of Food Processors
California Manufacturers & Technology Association
California Taxpayers Association
Chemical Industry Council of California
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Engineering Contractors' Association
Flasher/Barricade Association
Marin Builders' Association
Western Growers
Western States Petroleum Association
ARGUMENTS IN SUPPORT : The proponents state: "We support
SB 1020 to improve the operation of state agencies through
performance based budgeting. The purpose of
performance-based budgeting is to inform policy, fiscal,
and oversight decisions by the Governor and the
Legislature, to focus managers, supervisors, and workers on
achieving desired goals to show progress toward those
goals, and highlight the choices available to improve the
expenditure of public funds. The review process for
agencies and programs may include input from legislative
policy committees, the 'Little Hoover' Commission, the
Legislative Analyst, the Bureau of State Audits, and the
public. The periodic review provided by this bill will
ensure that agencies and their programs remain up to date
and relevant, serving the most important needs in
California and preserving scarce public resources. We look
forward to the independent and unbiased analysis of
programs and expenditures that will be part of this review.
By creating a more transparent and effective regulatory
environment in California, we will improve public
confidence in government and increase support for state
programs."
DLW:mw 6/1/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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