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February 4, 2013 | By | Posted in Legislature

PA lawmakers’ whims could still sway budgets under performance-based plan

By Eric Boehm | PA Independent

HARRISBURG – A state House committee approved a bill that would require performance-based budgeting in Pennsylvania and would set spending limits for each annual budget.

But the bill has a Mack Truck-sized loophole: The General Assembly can completely ignore those standards if it so chooses.

BUDGETS: Some Republican lawmakers want to see future state budgets held to a formula of population growth and inflation.

The bill, HB 35, was approved with a party-line vote by the House State Government Committee on Monday morning and sent to the full House for consideration. It would require each department of the government to provide a measure of costs and benefits as part of its budget proposal each year and would allow the Independent Fiscal Office to make recommendations for funding each agency and department.

The bill would also set a standard for annual spending based on population growth and the increase of the consumer price index, or CPI, which measures inflation.  The language is similar to the so-called TABOR cap used in Colorado but would not require the final budget to be held to that standard.

Republicans said the bill would lay the groundwork for more realistic budgetary conversation based on the performance of state programs – rather than the current system based on the assumption each department will receive at least as much money as it did the previous year, then get more based on lawmakers’ assessments of needs and desires.

“How can we talk about efficiency if we’re not looking at performance?” said state Rep. John McGinnis, R-Blair.

Though Democrats spoke favorably of performance-based budgeting, they said the bill was ultimately an attempt to set arbitrary spending caps for each year. The move, they said, could hurt programs and agencies that need increases due to emergencies, higher demand for services or a decline in federal funding.

“By chaining spending to CPI you are removing any discretionary ability to provide more funding to programs that are successful, or programs that need more money,” said state Rep. Michael Schlossberg, D-Lehigh.

Unions also oppose the measure.  In a letter sent to all members of the committee, Bill Dando, lobbyist for the AFSCME public services employees union, called the proposed spending cap “a gimmick that creates more problems than it solves.”

Several Republicans on the committee pointed out that final budgetary decisions remain in the General Assembly’s hands because the bill does not require lawmakers to stick to the recommendations from the Independent Fiscal Office or limit growth based on population growth and inflation.

State Rep. Daryl Metcalfe, R-Butler, said the bill’s approval on the day before Gov. Tom Corbett is scheduled to give his third budget address was no accident.

He expects it to be brought to the floor of the state House for debate within a few weeks.

The provisions in the bill would not take effect until the 2015-16 fiscal year.

Contact Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter.

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Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com or at (717) 350-0963.

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