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Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20150&cosponId=20577
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House of Representatives
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: August 8, 2016 10:38 AM
From: Representative Ryan Warner
To: All House members
Subject: Proposed Legislation - Zero-Based Budgeting Act
 
In recent budget cycles, new and evolving demands for public services have been met through excessive budget growth rather than redirecting preexisting revenues or eliminating outdated programs which no longer meet the needs of Pennsylvania citizens.

This "traditional" method of budget development, which relies upon incremental adjustments to expenditures made in previous fiscal years, insulates governmental activities from the thorough fiscal review expected by taxpayers. Many programs were established so long ago that the original statutory basis has either been forgotten or is out-of-date. Over time the budget is driven by inertia rather than by clear and defensible policy objectives.

In the near future, I will be introducing legislation that would establish the "Zero-Based Budgeting Act".

Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new fiscal year. Zero-based budgeting starts from a "zero base," and every function within an organization is analyzed or both its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

Specifically, my legislation will require certain state agencies (those with expenditures accounting for at least 20 percent of the General Fund budget) to prepare and submit a zero-based budget plan containing the following information:
  • A description of agency activities and a justification for the existence of each activity by reference to statute or other legal authority.
  • A quantitative estimate of any adverse impacts that could reasonably be expected should activities be discontinued, together with a full-description of the methods by which the adverse impact is estimated.
  • An itemized account of expenditures that would be required to maintain agency activity at the minimum level of service required by the statutory authority, together with a concise statement of the quantity and quality of services required at that minimum level.
  • An itemized account of expenditures required to maintain agency activities at current levels of service, together with a concise statement of the quantity and quality of services being provided.
  • A ranking of all activities that shows the relative contribution of each activity to the overall goals and purposes of the agency at current service levels.
It is my sincerely held belief that adopting zero-based budgeting will result in new cost efficiencies and streamlined, accountable government spending. Please contact Lindsay Ewing from my office at 717-787-1540 or lewing@pahousegop.com if you would like to join me in sponsoring this important piece of legislation.



Introduced as HB2286