State budgets tend to be long and bewildering documents, in which each agency or project occupies a separate line in the budget. Ordinary citizens cannot usually navigate these documents. Such budgets also encourage waste; when allocating new funds, state legislators normally work through old budgets line by line, increasing expenditure on each project regardless of its results in the most recent budget period.
In 2002, Washington State confronted a fiscal crisis like that facing many states across the country. The cost of vital state services was increasing much faster than the rate of economic growth and tax revenue. Citizens expected government-provided services to be maintained or even improved, but they did not want to pay more in taxes. Washington simply did not have enough revenue to maintain its previous level of spending.
The Director of the State Office of Financial Management suggested that changing the manner in which the budget was drawn up could save many costs. Under the existing system, it was difficult to slash existing programs, since legislators were so accustomed to increasing the funding for each line on the budget, regardless of its nature or effectiveness. Programs were seldom held accountable for producing results with the money that had been granted to them during the last budget cycle.
To find a way out of the cycle of increasing spending and decreasing revenue, the director proposed a new kind of budget, called the Priorities of Government (POG) budget. In each new budget, the chief executive was to begin by identifying how much money could be spent in total, and then to identify and prioritize the results that voters in the state wanted from their government. Money would be allocated to meet each broad goal, and specific agencies could only receive funding if they had proven that they could work effectively toward meeting an identified goal.
In 2002, Washington's governor presented a POG budget to the legislature for approval. The process eliminated much of the usual partisan bickering over the budget process. Republican legislators found that they could support the broad goals identified by the Democratic governor. While some legislators had feared that the POG was simply a way to camouflage harmful budget cuts, the clear, nonpartisan goals chosen by the governor helped to convince legislators that the POG existed to serve the state's interests.
Citizens also praised the new budget for being much easier to access and understand. In a POG budget, state services are listed under the goals they helped to fulfill, making each funding item's purpose more transparent to voters. Citizens were better able to understand exactly what their legislators were doing, and as a result, to hold them accountable for wasteful spending. Gubernatorial candidates from both parties have embraced the POG approach as a better way to draw up budgets in the future, and lawmakers from other states have expressed interest in replicating the program.