FOR IMMEDIATE RELEASE
June 10, 2011
BOSTON – Senator Jamie Eldridge on Thursday approved significant, fundamental changes in how state government operates, voting with a unanimous Senate in passing legislation that updates the Commonwealth’s finance laws and implements performance measurement requirements for government agencies and programs to improve efficiency, transparency and accountability.
“By instituting ongoing, data-driven evaluations on how state agencies are performing, this legislation will help us ensure that the government is operating as efficiently and effectively as possible for the citizens of the Commonwealth,” said State Senator Jamie Eldridge. “Increasing transparency and accountability in our government, as this bill does, has been one of my top priorities, and I’m proud to support it.”
The legislation requires government to use data to regularly evaluate the productivity, successes and failures of agencies and programs, and it establishes a special commission to make decisions about the ongoing need for existing state agencies and boards based on their core missions and performance.
The bill pushes government agencies toward more efficient electronic accounting and reporting with the elimination of outdated paper-based systems, and it moves the Commonwealth away from traditional “maintenance”-based budgeting with a requirement for “zero”-based budgeting.
In zero-based budgeting, instead of relying on the previous year’s budget as a starting point, a budget starts from zero and builds to a number that reflects the input from performance measures and an evaluation of current needs and functions.
Some states, including Washington, Utah and Virginia, are finding great success in moving toward a process of building their budgets from zero, rather than basing each year’s budget on the preceding year’s figures.
Other provisions in the bill include:
- Requiring quarterly cash flow reports to compare actual spending and revenue in a reporting period with the estimates previously made for that period and analyzing the discrepancies;
- Setting the state’s debt limit at $17.07 billion starting the first day of fiscal year 2012;
- Requiring an independent debt affordability study to be performed before the Governor sets a bond cap and issues bonds for a particular fiscal year, and requiring that report to be publicly available online; and
- To start distributing unrestricted local aid monthly rather than quarterly beginning in fiscal year 2013 to help cities and towns better identify their available cash flow and reduce the state’s reliance on short-term borrowing to support cash flow.
The finance reform legislation, when filed by Murray on April 28, received high praise from business groups, including the Associated Industries of Massachusetts, which called the plan “a significant and constructive contribution toward reshaping state government to meet the challenges of our times,” and the Massachusetts Competitive Partnership, which applauded the Senate President for bringing “this level of accountability” and said the legislation “will help make our Commonwealth much more effective and efficient in the future.”
The bill now goes to the House of Representatives.