Running head: STATE BUDGETING
January 28, 2009
The National Conference of State Legislatures (NCSL) classifies stated budget approaches into 5 categories: traditional/incremental, zero-based, program based, performance based, and a combination. State budget decisions are influenced by a number of decisions including economic conditions, political culture and history, and executive and legislative authority. The goal of this paper is to identify two states; one state that uses the incremental/traditional budget type and one that uses either performance or program based budget types, and relate the executive budget for the Department of Corrections of each state to characteristics of each budget type. The two states that will be illustrated in this paper are Arkansas and Texas.
Traditional/incremental budgeting is easily understood and simple to implement. Its’ focus is on discrete changes, which are usually small relative to the total budget. This type of budget focuses on inputs and the cost accountability of those inputs, rather than on performance (service outputs or outcomes). It also focuses on controlling expenditures by allocating certain amounts of money for specific expenses, with gradual changes from year to year. It requires that only additions or deletions to current budgeted expenditures be explained or justified.
Program and performance budgeting can clearly define for decision makers and the public what an agency or program does and how it performs. According to the NCSL, with a focus on outputs rather than inputs, performance-based budgeting allocates resources based on expected agency performance levels. The budget documents may include information about performance measures and performance objectives for the next budget period. Performance based budgeting focuses less emphasis on accountability and control of spending. It also uses long range planning tools rather than annual budget...