Promotes efficiency and performance management in state agencies

July 13, 2012 ... Sen. Richard T. Moore, D-Uxbridge, announced that the Senate on Thursday unanimously passed a conference committee report on bipartisan legislation that makes fundamental changes in the operations of state government, updating antiquated finance laws and implementing performance measurement requirements for all government agencies and programs to improve efficiency, transparency and accountability.

"This bill is a major step toward making state government work better and more efficiently,” said Sen. Moore. “It is also likely to help improve the state's bond rating which will save money for our taxpayers."

Originally filed by Senate President Therese Murray, D-Plymouth, in April 2011, and co-sponsored by Sen. Moore, the final legislation requires the use of data to regularly evaluate the effectiveness of agencies and programs throughout state government, including the executive branch.

For the first time, each agency will be required to have a performance management system in place and develop a strategic plan for measuring performance that can be evaluated publicly and by the Legislature and Governor, a proposal of which Sen. Moore was the primary sponsor.

The bill modernizes state government by pushing agencies toward more efficient electronic accounting and reporting systems with the elimination of outdated paper-based methods, and it also makes the following updates:

• Requires quarterly cash flow reports to compare actual results with prior estimates on spending and revenue and analyze the reasons for any discrepancies to improve future budget forecasts;
  
  
• Sets the state’s debt limit at $17.07 billion starting the first day of fiscal year 2012 and changes the arbitrary index rate to make it more responsive to true economic conditions, helping to control the state’s debt limit and further improve the state’s bond rating;
  
  
• Requires an independent debt affordability study to be performed before the Governor sets a bond cap and issues bonds for a particular fiscal year, and requires that report to be publicly available online;
  
  
• Requires improved reporting of spending on capital projects; and
  
  
• Requires monthly distribution of unrestricted local aid instead of quarterly distribution beginning in fiscal year 2014 to help cities and towns better identify their available cash flow and reduce the state’s reliance on short-term borrowing to support cash flow.

Additionally, while Sen. Moore initially sponsored a provision that would implement a cost-benefit-analysis of transitioning the Commonwealth to “zero”-based budgeting, the bill establishes a commission to make recommendations on the feasibility of moving to this process for the fiscal year beginning July 1, 2016. Under the process of “zero”-based budgeting, instead of relying on the previous year's budget as a starting point, a budget starts from zero and builds to a number that reflects the input from performance measures and an evaluation of current needs and functions. This budgeting method is finding great success in some states, including Utah and Virginia.

The government and finance reform legislation, when filed by Murray and Moore on April 28, 2011, received high praise from business groups, including the Associated Industries of Massachusetts, which called the plan “a significant and constructive contribution toward reshaping state government to meet the challenges of our times,” and the Massachusetts Competitive Partnership, which applauded the Senators for bringing “this level of accountability” and said the legislation “will help make our Commonwealth much more effective and efficient in the future.”

The conference report must now be taken up by the House of Representatives. Final action to send the bill to the Governor is expected next week.

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