In the early days of Gov. Bob Riley’s administration, Alabama adopted a system called “SMART governing,” in which government entities were required to set organizational goals and plan their spending accordingly.
“SMART” is a multi-phrase acronym — “S,” for example, stands for “Specific Results” and “A” stands for “Accountable to Stakeholders” — that sets forth the ideal characteristics of this type of budgeting.
When the 2012 fiscal year began last October, state officials abandoned the program with little fanfare.
“It’s disappointing,” said Jim Williams, executive director the Public Affairs Research Council of Alabama, a good-government think tank at Samford University.
Williams is one of the creators of the SMART governing process, a system that required state agencies to craft a list of organizational goals, develop benchmarks for measuring success toward those goals and file quarterly reports on their progress. That data was supposed to help the public understand how well state agencies were performing — and it was supposed to help department heads and Legislators decide which programs were worth funding and which should be abandoned.
The approach was not unique to Alabama. Most states have at least experimented with similar systems, said Gary VanLandingham, director of the Results First Project at the Pew Center for the States, and most have kept them in operation. Those budgeting systems go by different names in different states, but they’re broadly known as “performance-based” budgeting.
“The challenge in government is that there’s no bottom line, the way there is in the private sector,” VanLandingham said. “Without it, it’s hard to know whether you’re spending money in an effective way.”
In states where performance-based budgeting has caught on, state agencies often make their performance data available to the public online. Virginia, for instance, offers a website called Virginia Performs, which allows the public to see how the state grades itself on measures such as smoking rates, voter turnout, recidivism rates among former prisoners and police response times.
“It’s just so commonsensical I have trouble even explaining it,” Williams said.
But Alabama didn’t adopt SMART budgeting solely out of common sense, Williams said. A budgeting act, passed in 1976, required that the state adopt a strategic budgeting plan. SMART budgeting, however belatedly, met that requirement, Williams said.
For several years, the SMART budgeting program was run out of the Executive Planning Office, which oversaw the SMART process and posted the agencies’ budgeting reports online. The Executive Planning Office’s website is still online, but the office itself no longer exists, state officials said.
The program seems to have run aground due to a number of factors, including the paperwork involved, lack of legislative buy-in, recent budget cuts and long-standing structural problems in government.
“The information they collected was meaningful, but it wasn’t always something that was used to make decisions,” said Jonathan Barganier, the last person to run the Executive Planning Office.
Barganier, who now works as Gov. Robert Bentley’s Senate liaison, said agencies sometimes found the process difficult because lawmakers often didn’t base their budget decisions on the data.
“They didn’t control the appropriation of funds at the end of the day,” he said.
The additional paperwork was a challenge as well, Barganier said. He said the Executive Planning Office created an automated system to help agencies generate the quarterly reports demanded by smart budgeting.
That system is apparently still in place. The EPO’s website features reports for 2012 — though there are zeros or empty slots where numbers appear in earlier reports.
VanLandingham said paperwork and lack of legislative buy-in are problems initially in all performance-based budgeting systems.
“It’s not easy to do,” he said. “It takes a while to do it in a way that is sustainable.”
But Alabama faced problems unique to its political system. Among other things, Alabama earmarks much of its revenue, giving lawmakers complete control over only a small portion of state money.
“Earmarking is an easy excuse not to spend time thinking about the budget,” Williams said.
Bentley spokeswoman Jennifer Ardis acknowledged that the Executive Planning Office was no longer staffed, but she said state agencies are still using the core concepts of SMART budgeting.
“This administration does not use SMART governing in the same way, but our agencies are still using goal-setting in crafting budgets,” Ardis said. “We’ve streamlined the process.”
Some agencies have used the SMART process to manage cuts required in recent budgets. The magazine Governing recently quoted Michael Sparks of the state Department of Forensic Sciences as saying he’d used the process to guide cuts to his agency. Agriculture Commissioner John McMillan told The Star Wednesday that he used SMART principles when trimming his agency’s budget.
But Williams said the system is no longer what it was meant to be.
“It’s important to tell the public how you’re performing, and what your plans are for improving,” he said.
Capitol & statewide correspondent: 256-294-4193. On Twitter @TLockette_Star.