Quality of Governance: Smart Revenue and Budget Systems
California Forward's indicators on California's revenue and budget systems will enable the public and policymakers to quickly and clearly understand where revenue comes from, how expenditure decisions are made, which programs are funded and how much money they receive. (Other indicators will focus on the public value generated through public funds and whether that value improves over time.)
Governance indicators on public revenue and funding are designed to help Californians address these or similar questions:
- Does California’s revenue system generate sufficient funding to meet public needs in a way that is stable, equitable and consistent with public goals for growing the economy and promoting prosperity?
- In making funding decisions, do policymakers have sufficient information to assess the tradeoffs associated with spending more, spending less or shifting funds among programs that provide similar services?
- Do fiscal decisions take into account the long-term benefits and consequences associated with particular fiscal choices – such as creating new entitlements, increasing reliable or unstable revenue sources or using bond funds to pay for operating costs?
- Do fiscal policies and spending policies include incentives to reduce costs, shift resources to the most effective programs and eliminate or reduce funding for programs that are ineffective?
- Do policy decisions create incentives to shift costs across levels of government or across public programs, rather than improve outcomes as a way to reduce costs?
- Are there strategies in place to understand the effectiveness of revenue and spending decisions and to identify and put in place improvements?
Several organizations have been working to establish credible ways to assess the soundness of state fiscal policies, including the work of the Pew Charitable Trusts through its Government Performance Project. California Forward is exploring the lessons learned in those efforts in developing these indicators.
Please join California Forward and tell us what information you believe would most fairly and accurately reflect the soundness of California’s fiscal policies and fiscal decision-making. We would welcome the opportunity to keep you informed of our progress and to solicit your input on this effort.
Please tell us what you think on our JOIN US page or send us an email at info@caforward.org.
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