8. Investing in What Works through Budgeting

The Illinois Budgeting for Results (BFR) Commission is the state’s performance-based budgeting initiative. The commission’s annual report summarizes the state’s performance improvement efforts across seven statewide results areas (p. 9): education, economic development, public safety, human services, healthcare, environment and culture, and government services. BFR, in partnership with the state legislature, effectively repealed Blighted Areas Redevelopment Act of 1947, an outdated, discriminatory mandate housing policy. According to BFR, “the repeal of this act seeks to redress historical injustices in the use of state eminent domain authorities to remove affordable housing in predominantly Black neighborhoods without commensurate affordable housing to replace the demolished dwellings.” The Commission also recommended updating program evaluation methods, integrating diversity, equity, and inclusion analysis into the unit’s work in 2022 among other evidence-building activities supported by the Commission.

During session, agencies produce budget documents to inform the Legislature of needs. A 2017 Minnesota law requires state agencies to include performance data in their biennial budget documents. Budget instructions for FY 2024-2025, in particular the Governor’s Budget Request Instructions and the Departmental Earnings Instructions, directed agencies to include information about the evidence base for their budget proposals, equity based proposals, a summary of evidence, citations, and the amount to be spent on the activity. During budget negotiations, Minnesota Management & Budget reviewed the inclusion of evidence-based practices in proposed bills under negotiation offered by the Governor, House, and Senate. This review covered four budgets: Children & Families, Department of Education, Department of Health, and Department of Human Services. Among the proposals, the largest amount for EBPs was ~$3.7B, while the lowest was ~$2.2B. This analysis informed significant investment in EBPs, resulting in a final enacted budget including ~$2.7B in EBPs. This represents a floor for EBP inclusion in budgets, as not all agency budgets were systematically reviewed.

Considering the Department of Human Services and Department of Education budgets together, the enacted budget represents a $5.8B increase in spending in the FY24-25 biennium, of which $1.9B (33%) is allocated to identified EBPs.

A 1999 New Mexico law required all state agencies to submit annual performance-based budget requests that include outputs, outcomes, performance, and evaluation data. The 2019 Evidence and Research Based Funding Requests Act (SB58) amended the 1999 law by defining four tiers of evidence and further requiring certain state agencies to “identify each sub-program as evidence-based, research-based, promising, or lacking evidence of effectiveness” and report on the amount allocated for each of these evidence tiers. Agencies are also required to report how they prioritized evidence- and research- based sub-programs within the budget request. Each year, the Legislative Finance Committee (LFC) issues budget instructions that provide guidance for agencies for budget expansions and evidence-based programs as promulgated by the LFC’s Legislating for Results framework.

The state budget and associated budget documents from the LFC include performance data as called for by the Accountability in Government Act, which drives the state’s performance-based budgeting processes. These budgeting processes define performance measures (outputs and outcomes) to annually evaluate the performance of state government programs. The General Appropriations Act contains performance data for many agencies with LFC providing additional analysis and reporting in their policy and performance analysis, budget recommendation, supplemental charts and graphs, and post-session review reports. Furthermore, agency report cards, which include many budget measures, are updated quarterly to outline budget needs. When possible, these metrics are also examined in terms of equity and communities of color, often when these data are reported in the context of evaluated programs.

One example of the state achieving more equitable outcomes though investment has been in education. Some investments can help narrow the educational achievement gap. The Legislature has made significant investments informed by research to address this achievement gap and LFC research has repeatedly found significant gains for students from lower socioeconomic backgrounds, particularly in early childhood education and extended learning/school year for public schools. In a striking example, LFC found that the combined effects of state funded Prekindergarten and subsequent extended learning in grades K-3 eliminated the achievement gap for low-income children.

North Carolina’s budget instructions request that proposals for new and expanded programs and services include evidence supporting the programs’ goals and outcomes. North Carolina continues to strengthen the evidence behind budget requests since first introducing the guidance in 2019. The instructions also emphasize proposals that align with the Governor’s strategic priorities, including advancing equity and diversity.

OSBM asks agencies to supply evidence demonstrating the expected impact of any requests for new or expanded programs and services. For FY 2023-25 preparation, North Carolina continued to use the two-step budget submission process where agency and budget office staff work collaboratively to develop evidence-based approaches before submitting their final budget requests.

OSBM’s evidence rating scale provides a common language for communicating the effectiveness of a program or policy and the degree of confidence in those conclusions. Most recently, OSBM used these definitions to assess the strength of the evidence for specific budget requests during the development of the FY 2023-25 Governor’s Recommended Budget.  

Ohio’s Fiscal Year 2024-2025 Operating Budget Guidance initiated Results-Focused Budgeting which requires agencies requesting funds for new or expanding programs to provide additional information in their budget request to the Office of Budget and Management (OBM). To demonstrate a program’s effectiveness, each program provided a simple logic model, proposed output and outcome measures, and data for those measures for fiscal years (FYs) 2019-2025. If funds were requested for an evidence-based program, agencies were asked to provide a summary of the findings of the evidence, along with the study citation and, if applicable, the rating given by an evidence clearinghouse. In FY 2024, the state general fund is investing in the following: Healthy Beginnings at Home, $3,000,000; Help Me Grow, $46,500,000; Infant Vitality, $15,361,000. Over $300,000 was spent in FY 2023 to develop additional data-informed models and dashboards to implement evidence-based interventions.

To facilitate agency adoption of Results-Focused Budgeting, training was developed for OBM budget analysts, the Governor’s policy staff, senior fiscal and program staff of cabinet agencies, and cabinet directors.

Results-focused information provided in the agency budget requests informed discussions that built the Governor’s executive budget proposal and the testimony before the legislature in support of the budget.

OBM is now infusing results into the implementation phase of the budget process by requiring agencies administering priority programs to report results to OBM quarterly and develop results-focused dashboards. These dashboards will provide a one-stop resource for key decision-makers to explore progress toward reaching some of the Governor’s long-term goals. The dashboards will focus on enterprise-wide efforts to demonstrate results and ROI. As a proof of concept, OBM is teaming with IOP to develop results-focused dashboards to track progress toward improving water quality. This dashboard is in the final stages of development at the time of this submission.

The Governor’s 2022 State of the State address highlighted the value of data-driven policy-making centered on equity and racial justice to inform how the Governor’s investments would help build a stronger, more equitable future for all residents. For example, the Governor’s Racial Justice Council provided community feedback through the Council’s membership and prioritization of evidence-based processes for the development of the Governor’s Recommended Budget, which was delivered to the Legislature as part of the 2023 legislative session. Budget and Legislative Concepts Instructions for the 2023-25 budget incorporated a racial equity toolkit (Appendix B).

Budget Instructions for agencies focus on requirements for agencies to focus on long-term outcomes, program performance, and key performance measures for agencies.

A 2003 Oregon law provides a definition of evidence-based program as a program that “incorporates significant and relevant practices based on scientifically based research; and is cost effective” and states that the Oregon Department of Corrections, the Oregon Youth Authority, the Oregon Youth Development Division, and “the part of the Oregon Health Authority that deals with mental health and addiction issues” shall (1) spend at least 75% of state moneys that the agency receives for programs on evidence-based programs; (2) perform cost-benefit analyses; and (3) compile a biennial program inventory with results from funded programs.

Since 1997, Rhode Island state law requires agencies to submit performance measure data and targets as part of the annual budget request process. The Performance Management Unit within the Office of Management and Budget collects this performance data and works with agencies to achieve performance goals. Agencies are required to report on program evidence and performance when submitting budget requests, utilizing a tiered evidence scale (proven effective, promising, and theory-based).

Beginning in FY20-21, the Tennessee budget instructions aligned the governor’s priorities with agency strategic plans. The instructions also encourage agencies to invest in programs that are supported by research and evidence. The cost increase and base reduction support forms invite agencies to, within their budget requests, highlight their programs’ level of evidence based on the five evidence steps defined by the state’s Office of Evidence and Impact (OEI), as well as the most recent performance data.

OEI reviews each submission and provides the Budget Office and Governor’s Office with a summary report for use in the budget process. The summary report objectively presents the evidentiary information and any available data for each programmatic budget request to inform the governor’s decisions regarding those requests. Departments may choose to leverage this information in presentations to the legislature.

A 2021 Utah law (updated in 2023) requires agencies to set at least one performance measure for passed and approved budget requests of more than $500,000. These performance measures were reported to the Governor’s Office of Planning and Budget (GOPB) and to the Office of the Legislative Fiscal Analyst (LFA) within 60 days following the passage of the law. Annually, agencies are required to report performance measures identified in the appropriations bills prior to October 1 to support preparation for the next budget cycle. A Performance Measurement Playbook guides agencies on measuring outcomes rather than outputs to track return on investment. All measures and their data can be found at performance.utah.gov and cobi.utah.gov. Moreover, evidence of effectiveness is required through GOPB’s budget request forms, with requests having to outline the “evidence-basis” for the associated program.