In January I described a process for budgeting that focused on what to Keep not what to Cut. My friend Jim Chrisinger, a great public servant, just wrote this wonderful piece for the Des Moines Register on Budgeting for Outcomes as a better approach to rightsizing the budget than DOGE.

DesMoines Register February 9, 2025

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Better than DOGE? Focus Iowa budget on what you get, not what you cut

Gov. Kim Reynolds has announced her own Department of Government Efficiency, or 'DOGE,' effort. Cutting government is popular. Waste, fraud, abuse! But it’s hard to actually do and not that productive. As the Seattle Times put it, 'The usual, political way to handle a projected deficit is to take last year’s budget and cut. It is like taking last year’s family car and reducing its weight with a blowtorch and shears. But cutting $2 billion from this vehicle does not make it a compact; it makes it a wreck. What is wanted is a budget designed from the ground up.'

A budgeting experiment under Gov. Tom Vilsack’s administration in 2006 pointed toward a better way, one Republicans should appreciate, as a market mechanism drives it. This way of budgeting focuses on what we get, not what we cut. It focuses less on dollars and more on value for Iowans. Value is results per dollar; that should be a bipartisan goal, all while living within our means.

Start by listening to Iowans. Gather input about what they want from state government. With that input, create five to seven broad policy areas that represent the outcomes Iowans want from their government, e.g. safety, education, health, mobility and business climate. For each of these outcome areas, identify a few top-level metrics that we can use to tell us whether our investments are working, like cancer rates, highway deaths, test scores, child care availability, and business start-ups.

Next, determine how much will be spent, which could simply be the revenue forecast. There are limited dollars to spend. Then, budget to maximize the value Iowans receive for that amount of money.

Instead of traditional budget requests from agencies, ask them to make proposals to the governor for how they will achieve the results Iowans want and for what cost. Think of a Request for Proposals process. The governor issues an RFP for each of the outcome areas, detailing what she wants to see in proposals. Then agencies write proposals seeking funding.

Each proposal shows how the agency will achieve the results Iowans want and cites evidence and data supporting the proposal. Each proposal also includes performance measures the governor, the Legislature, and Iowans can use to gauge whether the program is working and how well. The governor and Department of Management use these measures in a performance management system that they use to regularly monitor performance, address problems, and drive improvement.

Not surprisingly the sum of all the proposals will exceed the amount allocated for that area, but there’s only so much money. The governor’s team ranks the proposals and negotiates with agencies about improving the value of proposals. Some proposals will not be funded, and some not at the level sought.

In the end, the governor assembles a package of proposals for each area, which together comprise the budget.

Baltimore faced a 15% projected discretionary spending deficit in fiscal year 2011 when it pioneered this budgeting system there. The results: High-value activities got more money and low-return activities were reduced or eliminated. For example, the $550,000 Creative Baltimore Fund was eliminated for lack of a clear strategy. City funding was eliminated for a quasi-governmental entity that provided prisoner re-entry and tutoring services. It had great anecdotal support but no data documenting impact.

Baltimore’s effort wasn’t just about defunding things. High-value activities received more money, and the proposal process spurred innovation. For example, an entrepreneurial Housing Code Enforcement manager wrote a proposal to increase the number of vacant and unsafe structures rehabbed, raise new revenue, and leverage tens of millions in private investment, all for less money than the year before. 'The competition for dollars encourages new thinking about how to deliver services for citizens,' observed Andrew Kleine, then Baltimore’s budget director.

Here in Iowa, the state invested in early childhood for the first time because a Federal Reserve study showed a 7-to-1 return on investment and because the business community supported it. Investments in training and drug treatment were made in the Corrections Department because data showed they would reduce recidivism and long-term costs.

This budgeting system taps into the experience and smarts of state managers and employees instead of treating them as the problem. Proposals present them with opportunities to suggest better ways of doing things. Rewarding managers and employees who take advantage of these opportunities will inspire even more the next time around.

A great weakness of traditional budgeting, which starts with last year’s spending as a baseline, is that it’s difficult to fund new, good ideas when there isn’t any new money. The old system effectively assumes that everything we’ve been doing is better than any new idea.

Once this system is in place, the 'cutting' game disappears. Each budget cycle presents a host of opportunities to make choices about how best to spend the money available. There will always be resistance to quitting doing things. But this way, you see the choices and can make better ones.

If Iowa is serious about government effectiveness, efficiency, and living within our means, there’s a better way than a DOGE gnawing away at the budget.

Jim Chrisinger is a retired public servant living in Ankeny. He worked for both Republican and Democratic officials at multiple levels of government.

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