Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Accounting for Oysters: The Importance of Fiscal Notes in Policymaking

As Maryland has learned, it’s crucial to know the costs of proposed legislation.

Here’s a classic dilemma for agencies: When the cost of a new project is underestimated, agency managers may have to drop aspects of the program, reassess targets, slow down timetables or even ask the legislature for more money. So how do managers avoid this quandary? Fiscal notes. That is, the legislature should factor into every debate about a bill the estimated cost of the program. 

Clipping fiscal notes to bills is easier said than done. Management of that process is dicey. Some states are laggards. They do not have their legislative analysts calculate estimates for all bills. North Carolina, for example, only comes up with a cost approximation when a legislator asks for it.

Nor do many states manage their fiscal note process to gain the most pertinent information available. Three years ago, the Center on Budget and Policy Priorities found that a good number of states failed to estimate costs beyond the next year or two, did not revise estimates when legislation was amended and only produced the estimates for a narrow set of bills. Elizabeth McNichol, senior fellow with the State Fiscal Project at CBPP, tells us that very little has changed for the better since then. 

One state that is known for doing a particularly good job managing its cost estimating process is Maryland. It requires that every bill have a fiscal note. David Romans, fiscal and policy coordinator with the Maryland Department of Legislative Services (DLS), tells us that the goal is to have a note in place before hearings start. Then, the department revises the fiscal note as versions of the bill change. In order to provide an optimal amount of information to legislators and citizens, the fiscal note also includes a detailed description of what the bill is supposed to accomplish.

How does this work out? By way of example, let’s look at a 2018 bill on oysters. It required that any project intending to restore or replenish Maryland’s oyster population had to use only native oyster shells to line the beds that would nourish new, live oysters. This appeared to be an inexpensive way to go, but DLS found otherwise. It reported that the bill may have a “negative economic impact on small businesses engaged in shellfish aquaculture” because of potentially limited availability of the now mandatory native oyster shells. What’s more, DLS explored the often overlooked financial effect of environmental impact statements -- a cost of between $250,000 and $2 million per statement for a project of this type. The bill didn’t make it out of committee. Although the decision may not have been cost-related, the fiscal information informed the discussion.

Beyond preparing a fiscal note for all bills, the CBPP ticks off at least four management practices that states should follow in addition to cost estimates: avoid partisan pressure by getting cost estimates from a nonpartisan body; project long-term impacts, as fiscal notes that only cover the next fiscal year can be misleading if they miss increases in cost as time goes on; revise estimates as needed; and post fiscal notes online. 

California, which regularly uses fiscal notes, struggles with at least one of these guidelines. The fiscal estimates come from many quarters. “A regular part of the deliberation over policy proposals is a disagreement about the estimates,” says Chris Hoene, executive director of the California Budget and Policy Center. “When we have representatives from the governor’s office and also the legislative analysts’ office, you have two sets of numbers starting every conversation.”

Not the best way to assure that fiscal notes are a manager’s best friend.

Government management experts. Their website is
Special Projects
Sponsored Stories
In recent years, local governments have been forced to adapt to a wildly changing world, especially as it pertains to sending bills and collecting payments.
Workplace safety is in the spotlight as government leaders adapt to a prolonged pandemic.
While government employees, students and the general public had to wait in line for hours in the beginning of the pandemic, at-home test kits make it easy to diagnose for the novel coronavirus in less than 30 minutes.
Governments around the nation are working to design the best vaccine policies that keep both their employees and their residents safe. Although the latest data shows a variety of polarizing perspectives, there are clear emerging best practices that leading governments are following to put trust first: creating policies that are flexible and provide a range of options, and being in tune with the needs and sentiments of their employees so that they are able to be dynamic and accommodate the rapidly changing situation.
Service delivery and the individual experience within health and human services (HHS) is often very siloed and fragmented.
In this episode, Marianne Steger explains why health care for Pre-Medicare retirees and active employees just got easier.
Government organizations around the world are experiencing the consequences of plagiarism firsthand. A simple mistake can lead to loss of reputation, loss of trust and even lawsuits. It’s important to avoid plagiarism at all costs, and government organizations are held to a particularly high standard. Fortunately, technological solutions such as iThenticate allow government organizations to avoid instances of text plagiarism in an efficient manner.
Creating meaningful citizen experiences in a post-COVID world requires embracing digital initiatives like secure and ethical data sharing, artificial intelligence and more.
GHD identified four themes critical for municipalities to address to reach net-zero by 2050. Will you be ready?