Friday, August 23, 2013

Can Government Play Moneyball? Priority Based Budgeting Communities Say YES!

"Based on our rough calculations, less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely. As former officials in the administrations of Barack Obama (Peter Orszag) and George W. Bush (John Bridgeland), we were flabbergasted by how blindly the federal government spends. In other types of American enterprise, spending decisions are usually quite sophisticated, and are rapidly becoming more so: baseball’s transformation into “moneyball” is one example. But the federal government—where spending decisions are largely based on good intentions, inertia, hunches, partisan politics, and personal relationships—has missed this wave." Can Government Play Moneyball? - John Bridgeland & Peter Orszag

What? "Less than $1 out of every $100 of government spending is backed by even the most basic evidence that the money is being spent wisely." How can this be? In an environment of extreme fiscal challenges across the country; unprecedented civic bankruptcies; significant unemployment; a national transportation infrastructure catastrophe; record national debt; a broken national health care system; and a failing education system, how can the Federal government, and state and local government as well, continue to blindly spend without prioritizing outcomes or measuring performance? At the Center for Priority Based Budgeting we are strong supporters of utilizing tax dollars to efficiently achieve community results!

This Decade of Local Government  obligates local governments to "lead the way in developing creative solutions to extraordinary problems. There are a number of reasons to be optimistic about this coming decade of local government." Against this backdrop of Federal and State ineptitude and paralysis, the CPBB never been so optimistic!

According to John Bridgeland, Director of the White House Domestic Policy Council under President George W. Bush, "In every domestic-policy briefing John led in the first term of the Bush administration, the president would ask some version of the following questions: How do we know this program will achieve the results as advertised?" This exact question is what every local government City Manager, County Administrator, Elected Official and other local government senior leader should be asking. More fundamentally, every local government organization should first be asking "What are the clearly defined results this community seeks to achieve?" "How will this program significantly contribute to these results?" "Are there alternative shared-service providers that can administer this program more efficiently and successfully?" And "How can we measure whether the program is meeting the results the community wishes to achieve?" This is how local government's need to operate in the Decade of Local Government, by running local government like a business!

Local governments now have an unprecedented opportunity to define their future! With the power inversion fundamentally realigning the base of authority back to local government's, the opportunity for communities to confidently define their own destiny has never been greater. And as we've seen through multiple examples captured in the Metropolitan Revolution and the CPBB's Decade of Local Government 2.0, examples abound of thriving communities operating in a results-driven environment of creativity, innovation, performance measurement and efficiency. And more importantly, more and more cities, counties, fire districts, school districts, airport authorities, and other various publicly run organizations are stepping to the plate and embracing the undeniable opportunities that the Power Inversion provides by implementing the principles of Fiscal Health and Priority Based Budgeting to independently define their own results-driven futures!

Take Portland, Oregon. In Weird is Good: What Portland's Economy Can Teach Every City in the World, Bruce Katz and Jennifer Bradley write "in his 2010 State of the Union, President Obama issued a challenge to the country: "We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America."

The Portland leadership community rose to the challenge. The metropolis had been hit hard by the Great Recession, shedding 80,000 jobs and seeing unemployment rise to over 11 percent. Led by Portland's then Mayor Sam Adams and the Portland Development Commission, a team of business and civic leaders sorted out how to double the region's exports. They dug deep into the data, deconstructing their economy. From this intense assessment emerged the Greater Portland Export Plan, which outlined several strategies to leverage the region's dual strengths: its leading global position in computers and electronic products manufacturing and its global edge in sustainability. In order to build on the region's strengths in sustainability, the plan has launched a major marketing campaign called "We Build Green Cities" to promote the region's clean tech companies and products as solutions for global clean economy challenges.

The future of the metropolis is "not just us selling each other microbrews," Tom Hughes, President of Metro Council, said. "What you really need is a culture where manufacturers or entrepreneurs begin to include foreign markets as part of their business strategy." Portland companies have primarily looked east to Asia for their markets. But there is also enormous potential and need in our hemisphere. After a trip to Brazil, Mayor Sam Adams established a formal relationship with Sustainable Hub, a São Paulo-based clean tech consulting firm, to help Portland firms crack the Brazilian market and vice versa."

While Portland has experienced success in this new power inversion driven metropolitan revolution
environment, note the visionary and autonomous policy decisions that are made and implemented across multiple partner agencies and projected globally. Metro has created a platform where multiple counties, based upon the international Portland brand, strategize and coordinate foreign export strategies to take advantage of the attractiveness of locally manufactured products. The PDC, by deconstructing the PDX and regional economy, identified locally manufactured green tech to promote globally. And then send Portland Mayor to Brazil and other global economic hot-spots to promote the region! This used to be the domain of the US State Department or the US Chamber of Commerce. In the power inversion of economic development, global trade and regional coordination are now firmly daily considerations of cities and counties in the era of the metropolitan revolution.

Priority Based Budgeting communities have a direct mechanism to adapt to a “Power Inversion” environment. Take the City of Boulder, Colorado. Below, you will see their Result Map for creating an “Economically Vital Community.” The City realized that to foster economic growth, they needed relevant criteria against which to evaluate every service they provide. Just look at what they’ve established as the definition of “Economically Vital” – regional and public/private partnering; a focus on entrepreneurs; drive to support creativity and innovation in the economy; and a role for city services that doesn’t necessitate they’re the sole service provider. It’s absolutely no wonder that Boulder ranked #1 recently among communities who are successfully increasing start-up activity.

The Priority Based Budgeting approach to spending is one marked by a relentless pursuit of results, maximizing the value of every dollar spent, and measuring success towards that end. Is this not "Moneyball" by another name? The era of local government innovation, collaboration and daring is now upon us. How will your community embrace the power inversion environment?  At the Center for Priority Based Budgeting, we're ready playing Moneyball! We invite you to join us and so many other local government communities who have embraced the Decade of Local Government!

Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

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If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.

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