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POG takes on new twist

Posted: Wednesday, May 26, 2004

OLYMPIA, Wash. Around the arcane and sometimes perplexing world of Olympia, POG isn't a children's game or a tropical fruit drink.

It's Gov. Gary Locke's acronym for ''Priorities of Government.''

OK, so that doesn't roll off the tongue, either.

But the governor, departing office in January after eight years at the helm, calls his new system of budgeting-by-priority one of his most important legacies, and something you should definitely know about.

Although he'll be a private citizen by the time lawmakers take up the new two-year budget next winter, his budget office is about to launch POG '05, hoping to involve the public as never before.

In a nutshell, Priorities of Government is a tool for building the state budget from the ground up in a time of scarce resources.

POG asks some ultra-basic questions:

What results do citizens expect from state government?

What's the best way to achieve that?

Given the dollars available, then, which services or activities should we ''buy''?

Locke says looking at state government as one big enterprise, rather than a bunch of agency budgets, gives taxpayers and lawmakers a big-picture way of determining what we really care about and want to finance and what we'll do without.

''It's always been my belief that we will never have the money to provide all the services that people want, so we have to set priorities,'' the governor says.

The traditional way, he says, is to figure out how much money there is to spend and then cut across-the-board until the budget balances, presuming you don't want to talk taxes. That lazy one-size-fits-all approach treats high-priority and low-level services the same, he says.

POG COMES ALONG ...

Two years ago, facing a $2.5 billion revenue shortfall, Locke was casting about for a smarter way to put together a $23 billion budget proposed for the Legislature without decimating core services or raising taxes. Consultant Peter Hutchinson suggested a little game of POG, and Washington became the first state to go the whole hog. (The centrist Democratic Leadership Council now calls it the most promising reform in state budgeting.)

The governor's budget office, advised by experts, devised 10 categories of results people want, some spanning multiple agencies, such as health, natural resources and public safety.

Teams of experts, including outsiders, then identified programs they wanted to ''buy'' with a target amount of money they were given schools, prisons, children's health, and so on. They arranged programs and services in descending order or priority, and when they ran out of money, everything south of the line fell off the table.

The budget office compiled it into a budget.

The process took just 10 weeks from start to finish and was substituted for the traditional budget that had been almost ready for the printer, recalls budget chief Marty Brown. Some agencies were shellshocked, but it was Locke's call.

''It's a good thing we only had 10 weeks, because we probably would have chickened out if we had had more time,'' Brown says with a laugh.

The new process didn't get as much attention as the governor's surprise decision to close the entire $2.5 billion budget gap with pay freezes, suspending education initiatives and cutting subsidized health care. Those decisions drew howls of protest from education and health care advocates who argued they should be given higher priority.

But eventually, legislators in both parties and both houses embraced the POG approach and adopted a budget quite similar to what Locke proposed. Earlier this year, Locke and lawmakers also compromised on a supplemental budget that used POG when the state treasury was expanding, rather than contracting. Higher education was the main winner.

LOOKING AHEAD ...

Locke and the POGsters have just begun a brand new budget-building round. The proposed 2005-07 budget will be Locke's last major achievement as governor, and he's clearly hoping the next governor and the future legislatures will adopt the new approach.

An internal memo sent to the POG team last month says the goal is nothing less than ''the best state budget in America'' and adds bullishly, ''This is no longer an experiment.''

The administration has kept the same goals from last time: improvements in public education; work force training; higher education; health; care of vulnerable children and adults; economic vitality of businesses and individuals; safety of individuals and property; quality of natural resources; cultural and recreational opportunities; and mobility of people, goods, information and energy.

An across-the-board goal is efficiency and effectiveness of government programs.

Under POG-think, if a budget line item doesn't measurably serve one of the above goals, it doesn't make the cut.

Brown, the budget director, plans to take the POG show on the road soon. He'll hold evening town hall meetings for the public at Gonzaga University and Seattle Central Community College on June 2 and 3.

Attendees will be given a quick Budget 101 overview and then will be given hand-held ''interactive clickers'' so they can vote their personal priorities for greater or lesser spending.

People will soon see the trade-offs, Brown says.

''They'll look at the consequences of their decisions,'' he says. ''These are the same decisions legislators have to make. And the governor.

''If they want to spend more on everything, we'll talk about that. Here are the choices: you either get rid of something or you can raise taxes.''

The agency has loaded considerable information on its Web site, www.ofm.wa.gov including current budget numbers and a primer on the process.

POG ... AND TAXES?

While POG may carry the implicit promise of living within your means, the process also can be used to build a more generous budget that would require a tax hike.

Locke says he hasn't decided whether to propose new revenue. The budget office will wait for revenue forecast updates in June, September and November, as well as the results of contract talks with state workers.

Locke is required by law to present a budget that is balanced within existing revenue. That's due around Christmas. The governor, or his successor, then has the option of submitting a second draft that spends more and requires a tax hike.

Brown says the state currently faces a $687 million budget problem. That assumes current level services, a modest pay boost for state workers, additional enrollment for higher education, and restarting two citizen-approved initiatives that mandate more spending for education and teacher salaries.

BACKSTAGE REFORM ...

The process has gotten strong reviews from the Legislature, academics and even some of Locke's strongest critics, such as the conservative Evergreen Freedom Foundation.

Bob Williams, the think tank's president and himself a former Republican gubernatorial nominee and House budget writer, says POG is far superior to the old approach and allows both the public and lawmakers to squarely debate one priority versus another.

''It is more transparent and it is focused,'' he enthuses.

Dick Davis, head of the influential business-backed Washington Research Council, says the reforms have taken some of the mystery out of budgeting. Instead of autopilot budgeting, the public sees sensible budget choices and clear ways of measuring results, he says.

Davis, who is an outside member of the POG steering committee, and Williams both argue that the part-time Legislature needs to quickly develop a similar process, rather than just argue about the administration's priorities.

Senate budget Chair Joe Zarelli, R-Ridgefield, says ''The dialogue and the expectation of living within your means are very good for the taxpayer.''

He says budgets have always been about setting priorities and that each of the four legislative caucuses and governor always seem to disagree. But he says he has high regard for POG, if only because it makes the process more public.

David Ammons is the AP's state political writer and has covered the statehouse since 1971. He may be reached at P.O. Box 607, Olympia, WA, 98507, or at dammons ap.org on the Internet.



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