13. Results-Focused Budget Process

The Colorado Governor’s Office of State Planning and Budgeting (OSPB) continues to make evidence an integral part of the budget process. Since 2016, OSPB has required executive branch departments to include evidence information in budget requests that are considered for inclusion in the Governor’s annual budget proposal. OSPB has adopted the use of a five-step “evidence continuum” that represents the states of building and assessing evidence on government programs.

With the large influx of the America Rescue Plan Act (ARP), OSPB has applied the evidence continuum as a cornerstone of its decision making process to ensure the strongest outcomes for residents. By applying this framework, Colorado is investing in programs and projects that promote the use of evidence-based and informed practices and programs like wraparound services for 500 Medicaid members, drawing from learnings from a Denver housing social impact bond project and a pilot Community Aging in Place – Advancing Better Living for Elders (CAPABLE) program, an evidence-based fall prevention program that will serve 400 aging residents; and funding the University of Colorado Health Sciences Center and for training and education for health-care, behavioral health-care, and public health-care professionals, to further promote the use of evidence-based models of care for treatment of pain and substance use disorders.

All OSPB budget analysts receive training on evidence-based policy and work closely with their respective executive branch agencies to systematically incorporate evidence information into their budget requests. This evidence information is an integral part of the briefings and decision-making process in which the Governor weighs the hundreds of budget requests that he will ultimately prioritize and include in the Governor’s annual budget proposal submitted to the legislature.

In the 2022 legislative session, OSPB and the Colorado Legislature’s Joint Budget Committee began implementing HB21-284, Evidence-based Evaluations for Budget, which codified requirements to use a consistent evidence framework to assist the legislature’s budget decisions. The legislation aligns with the evidence continuum and also appropriates funding that bolsters the efforts of Joint Budget Committee staff to incorporate evidence into the budget process. The Governor’s budget includes assessments of the evidence for each proposal in accordance with HB21-284, and Joint Budget Committee staff review the Governor’s Office characterization of the evidence (e.g., reviewing and critiquing studies cited in the proposal) and also may perform their own independent assessment of the evidence. Staff from OSPB and the Joint Budget Committee continue to collaborate on the implementation of HB21-284 and refine processes to improve the information provided to decision makers.

Additionally, the 2013 Colorado State Measurement for Accountable, Responsive, and Transparent Government (SMART) Act required all Colorado state agencies to submit annual performance reports to the state legislature as part of the state’s budget process. These reports include: (1) performance measures for the major functions of the department; (2) performance goals for at least the following three years; (3) a description of the strategies necessary to achieve those goals; and (4) a summary of the department’s most recent performance evaluation.

The Illinois Budgeting for Results (BFR) Commission is the state’s performance-based budgeting initiative. The commission’s annual report summarizes the state’s performance improvement efforts across seven statewide results areas (p. 9): education, economic development, public safety, human services, healthcare, environment and culture, and government services. BFR, in partnership with the state legislature, effectively repealed Blighted Areas Redevelopment Act of 1947, an outdated, discriminatory mandate housing policy. According to BFR, “the repeal of this act seeks to redress historical injustices in the use of state eminent domain authorities to remove affordable housing in predominantly Black neighborhoods without commensurate affordable housing to replace the demolished dwellings.” The Commission also recommended updating program evaluation methods, integrating diversity, equity, and inclusion analysis into the unit’s work in 2022 among other evidence-building activities supported by the Commission.

A 2013 Maryland law requires the Maryland Department of Budget and Management to submit an annual Managing for Results performance report to the state legislature as part of the budget process. This report contains the following information for each state agency: (1) the outcomes or results that have been achieved towards annual performance measures; (2) a three-year review of performance for each of the indicators; and (3) an estimate of expected program outcomes over the subsequent two years.

A 2017 Minnesota law requires state agencies to include performance data in their biennial budget documents. This performance data is frequently disaggregated to highlight disparities. Budget instructions for FY 2024-2025 direct agencies to include information about the evidence base for their budget proposals, a summary of evidence, citations, and amount to be spent on the activity. In addition, the state used evidence to inform funding decisions that resulted in $3.5 million in new or expanded evidence-based activities funded during the 2022 legislative session for a total of at least $150 million in new or expanded investments in evidence-based practices in FY 2020 through FY 2023.

A 2019 amendment to Mississippi’s 2014 performance-based budgeting law provided stronger, more rigorous evidence definitions for identifying intervention programs as evidence-based, research-based, promising, or other with no evidence of effectiveness. While the law continued to require the Mississippi Department of Corrections, Department of Health, Department of Education, and Department of Transportation to report during the annual budget cycle on their programs’ performance and cost-benefit ratio, the amendment authorized the Joint Legislative Committee on Performance Evaluation and Expenditure Review to designate additional agencies to comply with the law. Additional agency inventories include the Department of Revenue and Division of Medicaid. The Mississippi Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER) released a 2018 Results First Mississippi analysis on juvenile justice programs at a residential facility to help the state to invest more resources in high-quality interventions and ensure implementation fidelity.

North Carolina requires budget requests for new and expanded programs and services to include evidence and research supporting the programs’ goals, as well as the Governor’s strategic priorities. For the FY21-23 budget development process, Office of State Budget and Management (OSBM) increased its focus on evidence-based budgeting, data-driven decisions, and strategic management of the state’s resources.  OSBM asks agencies to supply data and evidence demonstrating the expected impact of any requests for new or expanded programs and services. For FY 2022-23 preparation, North Carolina continued to use the two-step budget submission process where agency and budget office staff work collaboratively to develop evidence-based approaches before submitting their final budget requests. Agencies who opted-in were given additional time to work with a diverse set of state stakeholders to develop evidence-based approaches before submitting their final budget requests.    

Both the North Carolina Governor’s FY 22-23 Recommended Budget Adjustments and American Rescue Plan budget recommendations included justification narratives for each of the main budget recommendation categories. Justification narratives include two data and evidence sections: one section to support why the funding was needed and a second section on expected impact that focuses on what program outcomes would be expected and the impact the program would have on the state if requests were funded.

A 1996 Rhode Island law requires state agencies to submit performance information as part of the state’s budget process. The State’s Office of Management and Budget collects this performance data and works with agencies to achieve performance goals. The Office of Management and Budget (OMB) rolled out a process for FY22 requiring agencies to report on program evidence and performance when submitting budget requests, utilizing a tiered evidence scale (proven effective, promising, and theory-based). This was accompanied by a new process to integrate evidence more fully into the OMB’s and the Governor Office’s materials used to make budgetary decisions.

As part of the budget process, Rhode Island provides regular trainings for state staff on how data and evidence can improve results. For example, the state has partnered with The Policy Lab at Brown University to provide finance and program staff at state agencies with training on how to use evidence throughout the Rhode Island budget process.

Beginning in FY20-21, the Tennessee budget instructions aligned the governor’s priorities with agency strategic plans. The instructions also encourage agencies to invest in programs that are supported by research and evidence. The cost increase and base reduction support forms invite agencies to, within their budget requests, highlight their programs’ level of evidence based on the five evidence steps defined by the state’s Office of Evidence and Impact (OEI).

OEI reviews each submission and provides the Budget Office and Governor’s Office with a summary report for use in the budget process. The summary report objectively presents the evidentiary information and any available data for each programmatic budget request to inform the governor’s decisions regarding those requests. Departments may choose to leverage this information in presentations to the legislature.

While Tennessee does not have a statewide policy that governs evaluations and evaluation-related activities, Tennessee’s evidence framework and evidence-based budgeting process outline the steps agencies use to build evidence in support of decision-making. The framework includes a multi-tiered definition of evidence that captures program logic, performance data, and rigorous evaluation.

A 2021 Utah law requires agencies to set at least one performance measure for passed and approved budget requests of more than $10,000. These performance measures were reported to the Governor’s Office of Planning and Budget (GOPB) and to the Office of the Legislative Fiscal Analyst (LFA) within 60 days following the passage of the law. Annually, agencies are required to report performance measures identified in the appropriations bills prior to October 1 to support preparation for the next budget cycle. All measures and their data can be found at performance.utah.gov and cobi.utah.gov.