Minnesota needs to measure budget effectiveness
Peter Heegaard and Angie Eilers, Star Tribune Commentary, June 24, 2013 – Now that another legislative session has come to an end, Minnesotans should be asking: What are the outcomes and how do we know what we are getting for a $38 billion budget? The answers we should expect are that our dollars are achieving the greatest impact at the highest rate of return possible. But we are not likely to hear this, because there is no one entity tasked or staffed to answer these questions with clarity or accuracy.
We believe that more strategic decisionmaking could be made at the state level if there were mechanisms in place that align “what we know” (research) with “what we ought to do” (policy solutions) at a “price we can afford” (cost-benefit analysis).
To have taxpayers believe that their dollars are generating essential services at a reasonable cost requires creditable analysis and reporting performed by an entity that can look beyond the next election cycle. In state government, our ability to measure what works best is hampered by legislative committees and state departments operating in their respective silos with budget constraints and required deadlines that make change difficult. Far too often, ideological and partisan debate begins before the facts have been established and agreed upon.
Imagine the stories the state could share with taxpayers once it was accurately determined that the investments made in our social-service and criminal-justice systems, for example, moved individuals from welfare to work effectively, with an attractive return on the dollars invested. Current work conducted in this area suggests that as much as $2 can be returned to taxpayers for each $1 invested in training over a five-year period. The individuals observed are now self-reliant and have become state taxpayers as well. Comparable analyses can be done in the fields of education, health care, corrections, human services, transitional and workforce housing, and economic development.
The state of Washington has pioneered this type of effort for more than 25 years. Very recently, its independent Institute for Public Policy proactively conducted an analysis on evidence-based criminal-prevention programs and determined that investing in proven prevention and early intervention programs had precluded the need for a future prison. The state did not need to build the new prison because of the investments it had made in “what works” over the previous 13 years. The prevention paid off. Taxpayers saved $26,000 per inmate per year. Money was saved and lives were changed.
Where in Minnesota’s state government today is this function being performed? For understandable historic reasons, numerous silos of specialization have evolved in state government. However, to accurately estimate the value of current and proposed state initiatives, cost-benefit analyses need to be done and shared with decisionmakers who, after all, are in the position to allocate billions of dollars.
We and like-minded citizens have been discussing a proposed institute similar to the one in Washington state over the past several years — an institute that is staffed by highly qualified researchers and economic analysts overseen by a nonpartisan board jointly appointed by the Legislature and governor. In addition, wherever this institute resides, it would be transparent to and accessible by local units of government and by citizens. It would serve as a statewide focal point for best practices and for transparency in the efficient use of taxpayer dollars.
Minnesota needs an evidence-based, value-for-dollar clearinghouse of information that guides legislators to set priorities for both the near and long terms. It should help implement the necessary accounting systems both within and across departments, as well as between the state, counties and local units of government. An outreach function should be included so that scheduled reviews can be shared with the public for comment on a nonpartisan basis.
Significant new challenges are emerging that will stretch our financial resources to the limit. Now is the time — as the state ends one legislative session and looks forward to the next — to begin the dialogue of how and where we assign responsibility for ensuring that our dollars are achieving the greatest impact at the highest rate of return possible for all Minnesotans.
Peter Heegaard authored “More Bang for your Buck,” examining the economic value of nonprofit and government programs; he leads an urban-issues education program. Angie Eilers received a Bush Fellowship to study the Washington State Institute for Public Policy; she consults on public affairs.