B. Explaining the Governor's Influence
III. CONTROL, MANAGEMENT, AND PLANNING
Alien Schick (1971) identified three operationally indivisible but analytically sep- arable orientations in public budgeting: control, management, and planning. To that trio, accountability might be added as a fourth orientation. Each of these orientations roughly corresponds to the budget formats: line-item, performance, program, and what John Mikesell (1999) calls the new performance budgeting.
The line-item budget focuses on goods and services to be purchased by government agencies, e.g., salaries, equipment, or commodities. In systems terms, it focuses on inputs. Typically, line-item budgets have an object-of-expenditure classification which is uniform across all government agencies. Appropriations are made to departments as organizational units and within departments to spe- cific object classifications, or line items. Funds must be spent according to the conditions of the line item. The objective of the line-item budget is to control expenditures. Control is a fiduciary responsibility to ensure that public funds are not stolen or otherwise mishandled. Control also aims to ensure that funds are spent for the purposes for which they were designated in the governor's budget recommendation or the legislative appropriation. Further, control may entail ef- forts to limit the size and scope of government. Line-item budgets sometimes are referred to as traditional budgets. This is especially the case when the atten- dant budget process is characterized by incremental approaches to decision making.
The performance budget focuses on agency activities and tasks, e.g., re- pairing roads, performing audits, or patrolling highways. The objective of the performance budget is to encourage the efficiency of activities and tasks. Work- load information and cost information for each unit of work are necessary ingredi- ents of performance budgeting. Comparisons may be made between actual and projected workload and cost information. Performance budgeting seeks to im-
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prove internal management and to achieve more favorable relationships between activities and the cost of performing those activities. Improved internal manage- ment might result in a higher level of activities at a constant cost level, or a constant level of activities at a lower cost level.
Program budgeting focuses on programs which represent the purposes for which governments exist, e.g., educational development, human services, or pub- lic safety. Programs may be grouped across departmental boundaries. Educational development as a program category might include activities within departments of elementary and secondary education, higher education, and adult and technical education. Human services as a program category might include activities within departments of physical health, mental health, and vocational rehabilitation. Pro- gram budgets, sometimes with the aid of a formal planning process, define goals and identify activities that contribute to achieving a particular goal. Funds are then allocated in an effort to reach those goals. Planning horizons, when planning is part of the budgeting process, often extend beyond one year. Program budgets, to a far greater degree than performance or line-item budgets, enable decision makers to consider spending decisions as levels of support for public policy alter- natives. Budget debates about alternative policy goals and means for achieving those goals might be informed by quantitative analysis comparing the costs and benefits of alternative uses of available funds.
The Planning, Programming, Budgeting System (PPBS), which was initi- ated in the U.S. Department of Defense in 1961 and extended to all federal agen- cies from 1965 to 1971, represents the prototype of program budgeting. PPBS was implemented in a number of states, including California, Michigan, New York, Vermont, and Wisconsin, as part of a common implementation project, and in Pennsylvania, which has generally been regarded as one of the more suc- cessful PPPS experiences. PPBS was a rational-decision system requiring speci- fication of program goals and objectives, specification of alternative means for achieving objectives, systematic analysis of the costs and benefits of alternatives means, and budget allocations based on systematic analysis. It was an attempt to introduce planning into the spending process, and impose cost considerations on the planning process. Reasons for the demise of PPBS have been thoroughly discussed elsewhere (Schick, 1973) and will not be recounted here.
Zero-base budgeting (ZBB) is another kind of program budgeting. ZBB links various service levels and levels of program activity with their costs. Service levels and levels of program activity are presented as decision packages which then are ranked according to their priority for agencies from the most essential (i.e., from zero base) to the desirable but less essential. In principle, at least, ranked decision packages representing agency priorities would be funded in their order of priority according to the level of resources available to the government for the fiscal period. Georgia adopted zero-base budgeting beginning with the 1973 fiscal year. It had a much publicized beginning, but on balance was only
160 Lauth and Stembauer moderately successful The formal documents and procedures including decision packages, multiple funding levels, and ranking processes were in place during the 1970s However, the Georgia budgetary process was not able to assimilate the program focus or decision making techniques of ZBB into existing budget practices and procedures Rational comprehensive techniques failed to penetrate incremental decision strategies at the micro level and never were perceived as useful at the macro resource allocation level (Lauth, 1978, 1997, Lauth and Rieck, 1979) In contrast, a modified ZZB system had some success in Idaho, where both the executive and legislative branches found it useful (Duncombe, 1981) Recent efforts to achieve greater accountability in service delivery and overall government performance have spawned new dimensions in program bud- geting, which variously are called performance-based budgeting, results-based budgeting, and new performance budgeting (focusing on outcomes rather than activities and tasks) The essential features of these new dimensions in program budgeting are agency identification of outcomes to be produced by programs, and the development ot performance measures to gauge progress toward achiev- ing those outcomes Results-based budgeting for the State ot Georgia is described in the following way
For each program, a program purpose, goal, and desired result that can be accomplished during the fiscal year will be developed This desired result will be measured at the completion ot the tundmg penod and progress toward achieving the result will be measured This initiative is designed to relate program results with program expenditures The Governor and the General Assembly can then decide through public debate whether or not the State is making the proper investment
Similar results-based innovations can be found in other states, e g , Virginia's Goal Setting and Performance Budgeting Process, and Florida's Government Per- formance and Accountability Act
The structure of each budget format encourages different kinds ot budget- ary conversations The line-item format permits comparisons of spending levels across fiscal years and permits the monitoring of spending within a fiscal year It does not support conversations about operational efficiency or the appropriate- ness of public policy alternatives The performance budget format invites conver- sations regarding operational efficiency, but not about policy alternatives The program budget format is intended to shift the focus of budgetary conversations away from items purchased, beyond operational efficiency, and toward consider- ations of public policy priorities and alternatives
Because these different budget formats have different advantages and dis- advantages, many governments have hybrid budget formats consisting ot ele- ments from all three types Because concern for control is critical to budgeting, the line-item format usually is the basic component of organization budgets Pro-
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gram budgets sometimes are used in conjunction with the line-item format, with cost information in line-item format and program information presented in narra- tive form. Far less frequently are standalone performance budgets used, although elements of performance budgeting are found in a number of state budgets.
The National Association of State Budget Officers (NASBO) periodic sur- vey of Budget Processes in the States (1997) contains information regarding ' 'budget approach'' used by the states. States self-report their ' 'budget approach'' as incremental, program, zero-based, or performance budgeting. While line-item budgets and incremental decision making are not the same thing, they often are linked as elements of traditional budgeting. The "incremental" category in the NASBO survey may be considered a proxy for the line-item budget format. In the NASBO survey, five states identified their approach as incremental, eight identified their approach as program, one identified its approach as zero-based, and none identified the approach as performance budgeting. Most of the other 36 states identified their "approach" as various combinations of incremental, program, zero-based, and performance budgeting. Three identified their budget procedures as using all four approaches, 12 identified their procedures as using three approaches, and 21 identified their procedures as using two approaches.
The modal category was program/incremental (n = 16). Clearly, "budget ap- proaches" in the states are hybrids, not pure types.
IV. STATE EXPERIENCES WITH PROGRAM AND