By Jonathan Walters

A couple of things were obvious as the LBJ School’s biennial conference on performance measurement came to a close a few days ago: While jurisdictions might still be struggling with the details of implementation, the whole idea of managing for results has begun to embed itself in state and local government. A quick glance at the conference’s offerings reflected significant advances across a wide public management front: There was very sophisticated discussion about everything from performance-based intergovernmental agreements to how to decide when to use a measurement strategy like the balanced scorecard in achieving some positive public result.

One other thing became obvious, as well. Proponents of performance measurement in government need to reevaluate how they sell this stuff. In particular, they need to think hard about the message they want to send when they advocate for performance-based budgeting. Implicit in the discussions of the day is that data on performance is going to somehow make budget decisions easier: Because agency X is achieving certain results, then some budget decision or other will evince itself as eminently sensible — or flat-out obvious. In other words, information on performance will make budgeting a relatively cut-and-dried exercise. And so there was a good deal of earnest discussion about such classic performance-based budgeting questions as whether high-performing agencies should get more money and weak performers less, or vice versa.

The fact is, governments are never going to achieve anything like what performance measurement proponents view as textbook performance-based budgeting. That doesn’t mean state and local governments should stop trying to measure performance. If anything, they should escalate their efforts. But it’s not so legislators can plug that data in some budgeting version of TurboTax to come up with a precise annual allocation based on last year’s performance and next year’s performance goals. It’s so legislators can, if they choose (and that’s still a big if), have better-informed debate and discussion come budgeting time.

And so proponents of performance-based budgeting might do well to refine the pitch: They need to stop selling performance-based budgeting as the Holy Grail of performance measurement. In fact, maybe instead of calling it performance-based budgeting, it should be called performance-informed budgeting. Because if states and localities reach some broad condition where good data on results is at least widely discussed during budget debates, then the movement has arrived.

Jonathan Walters, a Governing staff correspondent, is the author of Measuring Up: Governing’s Guide to Performance Measurement for Geniuses (and Other Public Managers).

Agree? Disagree? Want to expand on a point? E-mail us at mailbox@governing.com, and we'll post your comments here. Please include your name, location, government or business title or job description, and a daytime phone number (for verification purposes).

Reader Response:

DON’T EXPECT UNNATURAL ACTS

Jonathan Walters is on the mark to suggest that the real test of whether performance measurement is useful for budgeting is whether it informs budget discussions, not whether performance data can be plugged into formulas to determine explicit budget decisions. Recent research, including findings in several of the GASB state and local case studies www.rutgers.edu/Accounting/raw/seagov/pmg/index.html distributed at the Managing for Results Conference cited by Walters, indicate that’s just what’s happening in places like Louisiana, Austin, and other states and localities that have been making recent progress on performance measurement.

People who expect that council members or legislators will make budget decisions by data-dictated formula, rather than political debate, expect an unnatural act by elected officials. But elected officials can--and some do--become better informed by performance data to better frame budget issues, sharpen the debate, better focus their questions of managers at budget hearings, and ultimately become more confident in their necessarily political decisions. Also, performance information often influences the budget most before the legislative debate, when agencies, budget offices, and chief executives develop their proposed budgets, resulting in a different starting point for the budget dabate. So there are several positive ways performance data influences budgeting without explicitly dictating budget decisions.

Paul D. Epstein
Principal
Epstein and Fass Associates
New York City

The writer is a consultant with 30 years’ experience helping governments measure and improve performance, author of Using Performance Measurement in Local Government, and a member of the GASB performance measurement research team.

Recently in View:

That New Vermont Law: big trucks and civic involvement (posted April 25, 2000)

The Un-Seattle: the protestors who couldn’t shut down D.C. (posted April 19, 2000)

Second Banana Blues: the problem with lieutenant governors (posted April 17, 2000)

The States v. the Dot-Coms: why the e-tailers may be open to legal attack (posted April 12, 2000)

Darth Census: the not-so-evil long form (posted April 10, 2000)

Complete index of previous columns

Copyright © 2000, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.