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The City of Los Angeles Moves Toward Performance-Based Budgeting, Setting An Example for the Entire State
The Los Angeles City Council's Budget and Finance Committee took its first step toward a performance-based budgeting system starting with the Planning Department and the Bureau of Street Lighting last Tuesday. This step is the beginning of a large overhaul of how the city allocates money to city departments for services.
Based on a recommendation by City Controller Wendy Greuel, Councilman Mitch Englander decided to implement a move from a line-item budget toward a more efficient performance-based system through a phased approach. In her Oct. 2011 65-page recommendation, Greuel urged city officials to "develop strategic priorities and build the budget around shared outcomes." The new model would require general managers to do strategic planning and fund departments based on how well they meet certain performance measures throughout the year. The mayor and City Council allocate money to departments currently based on how they were funded the previous year.
Greuel and other proponents of the measure emphasize the benefits a performance-based system would be to taxpayers. Greuel said the move toward a performance-based budgeting system would make the budgeting system more accountable to Angelinos, allowing for a process that effectively allocates scarce resources, a more transparent system, and one that shows exactly how tax dollars are being spent and departments are performing. City Councilmember José Huizar, who has been a strong advocate of performance-based budgeting, noted that "taxpayers in the City of Los Angeles deserve better than our current budgeting system."
Los Angeles' officials latest move serves as a model for the state itself, where the state legislator passed a bill that would create a performance-based budgeting system for the state budget, but Gov. Jerry Brown vetoed it last October. He issued an executive order in December that was meant to address what he perceived to be shortfalls in performance-based budgeting, but the measures did not cover the current broken budget system as a whole, rather only a few, disparate areas.
With a move toward a performance-based budgeting system, all Angelinos will have a more accountable government and one that can be scrutinized for the way they are spending tax dollars. Departments themselves can also benefit from this system because they can understand how to set and measure their outcomes and offer citizens better quality services. If efficiency is not achieved and outcomes are not meeting set standards, city agencies and departments can lose funding, and the money can be better wisely spent for the citizens of Los Angeles. This system maximizes the value of each taxpayer dollar with the citizen's best interest in mind.