BILL ANALYSIS �
AB 2635
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Date of Hearing: April 28, 2014
ASSEMBLY COMMITTEE ON BUDGET
Nancy Skinner, Chair
AB 2635 (Olsen) - As Introduced: February 21, 2014
SUBJECT : Performance-based budgeting practices: Legislative
review
SUMMARY : Requires the Department of Finance (DOF) to submit a
progress report of state agencies that have used
performance-based budgeting per Executive Order B-13-11 issued
by Governor Brown. Specifically, this bill :
1) Requires the Department of Finance to submit a progress
report to the legislature on state agencies using
performance-based budgeting by April 1, 2015.
2) Grants the budget committees of the legislature, per the
review of the DOF progress report, the power to withhold or
modify funding for state agencies who have not complied
with Executive order B-13-11.
COMMENTS : This bill calls for an update on Executive Order
B-13-11 by requiring the DOF to submit a report to the
Legislature on which State agencies have incorporated
performance based budgeting since the Executive Order was
signed. It also calls for the budget committees of both houses
to use this DOF report when deciding to modify or withhold
funding during the next fiscal year.
In 2011, the Legislature passed, and the Governor vetoed SB 14
(Wolk), which would have required DOF to develop and implement a
plan to incorporate performance-based budgeting for all agencies
within the state. The Governor, stating his concern with a "one
size fits all budget", vetoed the bill and issued Executive
Order B-13-11 in response.
Executive Order B-13-11 required the Director of the Department
of Finance to develop a plan which modifies the budget process
to increase efficiency and focus on accomplishing program goals.
The plan was to be developed in conjunction with department
directors as well as agency secretaries, and was to be submitted
to the Governor's office within 90 days of the Executive Order
AB 2635
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being signed. The Governor ordered DOF's report to outline the
following:
1) A strategy to incorporate program-evaluation methods
into the budget process for selected activities and
Programs. These Methods include zero-based budgeting,
performance measures, strategic planning, audits,
cost-benefit analyses, and program reviews.
2) Ways to ensure transparency about program goals,
outcomes, and funding.
3) A process for collaborating with the Legislature,
particularly in establishing program goals and measuring
program outcomes.
4) A structure to work with local governments to develop
methods to measure and evaluate performance of state
funded, locally-administered programs
5) An implementation timeline beginning with the release of
the 2012-13 Governor's Budget.
While this bill calls on DOF to report on state agencies that
have incorporated performance based budgeting methods as a
result of executive order B-13-11, it is silent on many of the
other requirements contained within the Governor's order. The
Department of Finance indicates that the State is currently
using Zero-Based budgeting analysis in several departments at
this time. Given the wider adoption of this element of the
Executive Order, there may be value to including zero-based
budgeting analysis in any report requested by the Legislature.
It is also important to note that the report requested within
this legislation could be obtained through other methods outside
of statute, such as supplemental report language requested
through the budget process.
REGISTERED SUPPORT / OPPOSITION :
AB 2635
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Support
California Forward Action Fund
The National Federation of Independent Business (NFIB)
Opposition
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Analysis Prepared by : Matthew Cremins / BUDGET / (916)
319-2099