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Downing Votes with Unanimous Senate to Pass State Finance Reform, Modernizing and Improving the Efficiency of State Government
June 10, 2011

Performance management and Zero-based budgeting implemented
BOSTON – On Thursday the Massachusetts Senate unanimously approved significant, fundamental changes in how state government operates, said State Senator Benjamin B. Downing (D-Pittsfield). The legislation updates the Commonwealth’s finance laws and implements performance measurement requirements for government agencies and programs to improve efficiency, transparency and accountability.
“This bill moves Massachusetts into the 21st century, updating how we do business today,” said Downing. “The legislation also helps assure that we are using state resources in the most efficient way, that we fund programs that are working and reflect our priorities, and that we fix or eliminate programs that are not working or no longer necessary.”
“The laws governing our state finances have never received a comprehensive update, and it’s about time we do it,” said Senate President Therese Murray (D-Plymouth), the author and lead sponsor of the bill. “It’s also time we require all state-funded agencies and programs to start measuring performance and outcomes. We should no longer assume that the purpose of any state budget is to preserve existing programs and agencies.
“Instead, we need to continuously evaluate agencies and programs and invest in those that are high-performing,” Murray continued. “If we’re putting taxpayer money in, we need a better idea of what’s working and what isn’t. That’s what this bill does for us.”
The legislation requires government to use data to regularly evaluate the productivity, successes and failures of agencies and programs, and it establishes a special commission to make decisions about the ongoing need for existing state agencies and boards based on their core missions and performance.
The bill pushes government agencies toward more efficient electronic accounting and reporting with the elimination of outdated paper-based systems, and it moves the Commonwealth away from traditional “maintenance”-based budgeting with a requirement for “zero”-based budgeting.
During the Senate’s debate an amendment proposed by Minority Leader Bruce E. Tarr of Gloucester was adopted, requiring the Governor to file a zero-based state budget in fiscal year 2017 and then at least once every four years after that.
Some states, including Washington, Utah and Virginia, are finding great success in moving toward a process of building their budgets from zero, rather than basing each year’s budget on the preceding year’s figures.
Other provisions in the bill include:
  • Requiring quarterly cash flow reports to compare actual spending and revenue in a reporting period with the estimates previously made for that period and analyzing the discrepancies;
  • Setting the state’s debt limit at $17.07 billion starting the first day of fiscal year 2012;
  • Requiring an independent debt affordability study to be performed before the Governor sets a bond cap and issues bonds for a particular fiscal year, and requiring that report to be publicly available online; and
  • To start distributing unrestricted local aid monthly rather than quarterly beginning in fiscal year 2013 to help cities and towns better identify their available cash flow and reduce the state’s reliance on short-term borrowing to support cash flow.
The finance reform legislation, when filed by Murray on April 28th, received high praise from business groups, including the Associated Industries of Massachusetts, which called the plan “a significant and constructive contribution toward reshaping state government to meet the challenges of our times,” and the Massachusetts Competitive Partnership, which applauded the Senate President for bringing “this level of accountability” and said the legislation “will help make our Commonwealth much more effective and efficient in the future.”
The bill now goes to the House of Representatives.


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