More Cost-Benefit Analysis Could Help NM Budget Better

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State Rep. Gail Chasey, D-Albuquerque

State Rep. Gail Chasey, D-Albuquerque

The state Senate has passed a proposal that would ask parts of state government to start doing more research on which of their programs delivers the best return on investment.

This year’s legislative session is all about putting together a budget for the state, but money is getting tighter and lawmakers are looking for ways to stretch public dollars.

The bill (SB 9), sponsored by Rep. Gail Chasey, D-Albuquerque and Sen. Sander Rue, R-Albuquerque, says when state agencies are putting together their budget requests they should prioritize programs that are proven to work.

New Mexico has been doing some of this since 2011, when the Legislative Finance Committee decided to work with a nonprofit program that encourages states to use cost-benefit analysis in making budget decisions.

The Pew-MacArthur Results First Initiative focused on spending on early childhood education and criminal justice.

Rue and Chasey’s bill would expand that to other parts of state government.

“It’s a way to try to spend our money well and really improve our programs,” Chasey said Friday in an interview. “Perhaps we won’t spend less money, but we’ll be spending it more wisely.”

The state House has less than a week to approve the bipartisan proposal.

Better analysis could help cut spending

More evaluation of state programs could help save money, analysts say. In order to put together a new budget, the state looks at the last budget and asks the various parts of government what they need for the next year, then makes incremental changes. That means the budget tends not to change very much, and when it changes, it’s most likely to grow.

When the state has less money to work with, as is the case this year, more precise decisions can be made if lawmakers have more information about how effective programs are.

The Legislature hasn’t used this kind of analysis enough, according to Bruce Perlman, a professor of public administration at UNM who worked in the state treasurer’s office and as a deputy chief of staff in the Richardson administration.

“They don’t spend very much money on it and they don’t evaluate enough programs so we don’t have very much information about how efficient they are,” he said in an interview with NMID before the legislative session began.

That could change if the bill makes it through the Senate before the end of the session Thursday.

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