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Massachusetts Senate President Therese Murray called Tuesday for dramatic changes in the way the state determines how taxpayer money gets spent, saying it operates under "clumsy and outdated" government finance laws.
Murray testified before a legislative committee in favor of a bill that would, among other things, require state agencies to periodically justify their continued existence and move the state toward a budgeting system that is based more on performance than simply the level of past appropriations.
"Many of our state finance laws are organized around the notion that the starting point for and purpose of any state budget is to preserve existing programs and agencies," Murray told the State Administration and Regulatory Oversight panel. "These notions are at odds with the more modern form of budgeting."
The Plymouth Democrat added that many of the state's antiquated finance laws date back to the early 20th century, "well before the advent of calculators, much less computers."
Proposals to overhaul the state budgeting process - which Murray herself conceded were "wonky stuff" - have stalled previously on Beacon Hill. But the support of the Senate president, who along with the House speaker is one of the state's two most powerful lawmakers, could provide added impetus.
The state's ongoing fiscal crunch and calls to eliminate wasteful or extravagant spending could also be a catalyst for change. The House recently passed and sent to the Senate a $30.5 billion budget that calls for cuts to help bridge an anticipated $1.9 billion gap between revenues and spending.
Murray has identified the bill as one of her legislative priorities in the current session and has actively sought the support of the business community.
John Regan, executive vice president of Associated Industries of Massachusetts, said a more modern and transparent state budget process had the potential to improve the business climate by inspiring more confidence in state government.
The bill would "ask (state) agencies to defend everything they do," Regan said.
A key provision of the legislation calls for requiring agencies to periodically appear before a commission to demonstrate that their programs and services remain effective and deserving of continued state funding. Agencies that fall short could be abolished or folded into other departments.
The 10-member commission would consist of six lawmakers and four members from outside government, including one from AIM.
While some skeptics note that the state auditor is currently charged with reviewing state programs, supporters of such reviews insist such audits are not by themselves enough.
The proposed approach "requires you to periodically assess how you are doing and whether or not the methodology is working," said state Treasurer Steven Grossman, who also testified in favor of the bill.
Under the current system of "maintenance" budgeting, Murray explained that budget writers look at the appropriation an agency received in the previous fiscal year, then ask agency officials what it would cost to do the same amount of work in the upcoming year. Agencies can also make the case that they want to do more and need additional funding.
The system doesn't always measure if the state is getting "the most bang for our buck," Murray told reporters following her testimony.
Murray said her eventual goal was a zero-based budgeting process in which the Legislature essentially starts from scratch each year when assembling a budget. One objection raised to such a system is that it would likely be far more time consuming and thus require more staff on the Ways and Means committees. Even under the current system, the Legislature occasionally fails to meet - or barely meets - the July 1 deadline for preparing a spending plan.
But Murray insisted that any extra time or expense would ultimately be worth it.
"This is the 21st century. Every business does performance review and there is no reason government shouldn't do it," she said.
This program aired on May 4, 2011. The audio for this program is not available.
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