Investing in Results: Using Performance Data to Inform State Budgeting

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The use of performance information in budgeting is an important topic for state officials, especially in a limited resources environment with numerous spending demands and not enough tax revenue to go around. “More and more of our budget is being eaten up by things that we can’t control. So we have to make the most of the budget dollars we do have,” explained one state budget officer at a recent NASBO meeting. NASBO has gathered state budget officials together several times to discuss their experiences and challenges with using performance information in budgeting, planning and program management. Based on these member discussions and state-specific case studies, NASBO released a report that highlights some key themes and lessons learned related to performance budgeting, as identified by state budget officers. Additionally, NASBO completed case studies of eight states from different regions and at different points in the process of implementing performance budgeting, including Connecticut, Iowa, Minnesota, Nevada, Oregon, Utah, Virginia and Washington.

The report also includes a set of key terms and definitions and an appendix with the eight case study profiles, as well as several sidebars on other topics related to the growing use of data to drive decision-making. NASBO expects that activities to increase the use of performance information and apply a results-based framework in state budgeting will continue, and our research and monitoring of efforts in this area will be ongoing.




Agency Engagement and Buy-In


  • High-level leadership is a key determinant of success.
  • Agencies must see real value in the initiative.
  • Performance budgeting should not be simply a budget cutting exercise.
  • Agencies must build knowledge and capacity, and be held accountable for their data and results.

Role of the Legislature


  • Statutory framework may help ensure continuity.
  • Determining optimal legislative involvement in the process is an open question.

Purpose and Design


  • The number of measures is an important balancing act.
  • Careful selection of measures is required to ensure they are meaningful and useful.
  • Performance-based initiatives can be linked to other good government efforts.
  • Integration and communication increase the opportunities for successful use of performance information.

Sustaining the Initiative


  • Process change takes time.
  • Performance budgeting is a tool, not a cure-all.
  • System must be flexible.