Senate, House Send State Government and Finance Reform Bill to Governor
July 28, 2012
BOSTON – House Speaker Robert A. DeLeo joined colleagues in theLegislature in sending bipartisan legislation to the governor 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.
“I commend Chairman Kocot of the Joint Committee on State Administration and Regulatory Oversight and the rest of my colleagues in the Legislature for the passage of this bill,” said House Speaker Robert A. DeLeo. “This legislation streamlines our Commonwealth’s government and finance administration, while also promoting transparency and accountability.”
“This bill fundamentally reforms the way state government works,” said Senator Anthony Petruccelli, Senate Chair of the Joint Committee on Financial Services. “By requiring our government to be data-driven and requiring regular evaluations of our government’s productivity, successes and failures, this important measure will result in making agencies and programs more effective and accountable to the citizens of Massachusetts.”
“This bill will provide better accountability and transparency in our government and finance administration,” Representative Kathi-Anne Reinstein said. “This legislation will cut waste and by promoting efficiency we can also save taxpayers money.”
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.
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by pushing agencies toward more efficient electronic accounting and reporting systems with the elimination of outdated paper-based methods, and it also makes the following updates: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, the bill establishes a commission to make recommendations on the feasibility of moving the Commonwealth from traditional “maintenance”-based budgeting to a modern “zero”-based budgeting process for the fiscal year beginning July 1, 2016. This budgeting method is finding great success in some states, including Utah and Virginia.