1. Overview of the Mississippi Legislature’s Efforts to Revitalize Performance Budgeting June 11, 2015

2. 1994: Mississippi Performance Budget and Strategic Planning Act Purpose: to improve the efficiency and effectiveness of state government by changing the state’s budgetary process: – From line-item budgeting by major object of expenditure; e.g., salaries, travel, contractual services – To budgeting based on programs and performance 2

3. The Act required: Inclusion of program-based performance data and targets in agency appropriations bills Annual submission of agency five-year strategic plans to LBO and DFA for their review Annual reporting of evaluation of agency program performance data to LBC 3

4. 20 years later… Act not working as intended Agencies: – focused their performance measures on outputs (activities done) rather than outcomes (results achieved) – developed their strategic plans to comply with letter of the law, not to drive their performance Legislature having difficulty using the planning and performance information to make appropriations decisions 4

5. 2013: Factors influencing Move to Revitalize Performance Budgeting Increasing fiscal and political pressure to make state government work more efficiently and effectively Improved software and technology allows for collection and analysis of large datasets a new analytic framework for making budgetary and policy decisions: the Pew-MacArthur Results First Initiative 5

6. 3 Key Components of Revitalization Effort 1.Development of statewide strategic plan 2.Development of a comprehensive inventory of state agency programs 3.Implementation of Pew-MacArthur Results First Initiative 6

7. Development of Statewide Strategic Plan 7

8. Purpose of Developing a Statewide Strategic Plan Help the Legislature and agency staff to target state government resources and efforts toward achieving priority outcomes Provide the data to show whether long-term and short-term performance on each priority outcome is improving, maintaining, or worsening Provide the basis for developing appropriate responses to long-term negative trends in performance 8

9. 9 Framework for Development of Mississippi’s Statewide Strategic Plan

10. Development of Statewide Elements of State’s Strategic Plan Legislative leadership developed the statewide goals and benchmarks by holding focus groups with agency heads in each of 8 key policy areas to identify: – Strengths – Weaknesses – Opportunities – Threats Legislative staff identified additional benchmarks by reviewing performance measures tracked by other performance budgeting states such as Texas 10

11. Statewide Elements of State’s Strategic Plan Resulted in 328 benchmarks in 8 key policy areas: – Economic Development – Education (K-12 public schools; higher education; 32 benchmarks for community and junior colleges) – Public Safety and Order – Health – Human Services – Natural Resources – Infrastructure – Government and Citizens 11

12. Statewide Elements of State’s Strategic Plan Public release on July 24, 2014: – Building A Better Mississippi: The Statewide Strategic Plan for Performance and Budgetary Success Available on the internet at www.: – peer.state.ms.us: Special Reports – lbo.ms.gov: Publications 12

13. Development of Comprehensive Inventory of State Agency Programs 13

14. Purpose of Comprehensive Program Inventory Allows for identification of: – total resources ($ and FTEs) committed to and results achieved by each program of state government – programs that are not necessary (do not serve a clear public purpose), not working, or duplicative, resulting in: improvement, elimination, or resource transfer – opportunities for shared services 14

15. Legal Mandate for Comprehensive Program Inventory MISS. CODE. ANN. Section 27-103-159 (HB 677, 2014 Session) requires: – the development of a comprehensive inventory of state agency programs/activities for use in budgeting process, beginning with four pilot agencies: Corrections, Education, Health, and Transportation – Classification of the programs by research basis: evidence-based, research-based, promising practice, no basis in research – Identification of premise, goals, objectives, outputs, outcomes and other performance measures, including cost-benefit analyses, for each program in the inventory [Note: existing performance measures already reported to external parties such as the federal government will be used wherever possible] 15

16. Scope of Comprehensive Inventory Includes all programs (including administrative “programs”) provided by or funded through state government: – regardless of funding source (federal, state, self-generated) – regardless of who carries out the program (state employees, contractors) – for education, includes all programs carried out by the SBCJC as well as each of the state’s community and junior colleges 16

17. Examples of Programs Intervention program (a set of activities designed to improve the behavior or learning of program participants): – I-BEST: Integrated Basic Education and Skills Training, a program that seeks to accelerate basic skills students’ transition into and through a college-level occupational field of study Non-intervention Programs – Prison security – Food services Administrative programs: – General accounting – Compensation administration 17

18. Other Program Inventory Tasks Programs in the inventory will be further classified by: – whether they adhere to best practices of other states; industry standards (for non-intervention programs) – linkage to a statewide goal or benchmark – broad program category; e.g., administrative, intervention, regulatory Program expenditure and performance data will be collected in MAGIC The performance data will be audited for accuracy, analyzed, and interpreted for use in budgetary decision- making Evidence-based intervention programs will be audited for fidelity to program design 18

19. Implementation of Pew-MacArthur Results First Initiative 19

20. Implementation of Pew-MacArthur Results First Initiative Built upon an innovative cost-benefit analysis model that helps states to invest in policies and programs that are proven to work by identifying: – Which programs are proven to work through evidence- based research and which do not – The potential returns on investment of funding alternative programs – Ineffective programs whose resources could be redirected to more effective programs Mississippi began Results First work in Adult Corrections 20

21. Evidence-Based Programs Ranked by Net Present Value (Calculated Using Results First Model) 21