What problem does it solve? Programs look to use 100% of their allocated budget in fear of not receiving the same amount the following fiscal year. This leads programs to try and spend the full amount of their budget unnecessarily. What is your solution and who does it apply to? Unused budget money across the State of New Jersey should be pooled in a separate account and returned to the tax payer via a check annually. A program that didn't spend its entire budget should be applauded and granted the same amount of budget money even though the previous year's wasn't entirely used. There are scenarios where spending ebbs and flows year to year due to unforeseen circumstances What is the anticipated impact? Programs won't look to spend all of their budget unnecessarily and won't be in fear of losing the budget amount the next year. The taxpayer benefits due to a return on unused tax spending.
This idea encourages more care in how various State governmental departments and agencies spend their budgeted funds, as well as providing a mechanism to regularly send “rebates” to taxpayers. Removal of penalization concerns, due to savings remaining at the end of fiscal years, would likely promote efficiency gains and operational innovation. On balance, this good idea would be very taxpayer-friendly, helping counter some negative public perceptions about government.
This idea would be improved by implementation of “entrepreneurial budgeting” (EB) and retention of long-term savings, before eventually issuing “rebates”. EB has been employed by local governments in the US and other democracies’ governments. Essentially, once top-level policy makers establish broad guidelines, all levels of departmental/agency management would be granted more budgetary and operational decision flexibility on how best to meet required performance goals.
EB implementation should provide additional incentives to be both efficient and effective, as well as serve to increase accountability. Keeping accumulated savings to augment each unit’s annual budgets would serve to even out “spending ebbs and flows”, reducing the need to consider unpopular budget cuts or tax increases, particularly during recessions or emergencies.
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