Zero-based budgeting has a history

There are fads that come and go in government. Reorganization has happened half a dozen times in Nevada state government in the last 40 years or so.

Then there was “Reinventing Government,” the title of a 1992 book by David Osborne and Ted Gaebler that became very chic for a while, including with Nevada Governor Robert Miller, who claimed to be using its principles in retooling state government, though his critics said he seemed not to understand what Osborne and Gaebler had prescribed.

Recently I was reading in my Pahrump Valley Times about Sheriff Tony DeMeo being subjected to “zero-based budgeting.”

Zero-based budgeting (ZBB) is a method of preparing a budget that starts from zero at the beginning of each year instead of using the previous year’s budget as a starting point. In theory the idea is to reassess each function from the ground up and justify it, though it rarely is that extreme in practice.

In private business, there are limits on the use of ZBB. It’s mainly used on administration. And most ZBB experts say there are sharp differences between its use in private business and public administration.

ZBB was a fad during the 1970s, made popular mostly by Georgia Gov. Jimmy Carter when he became president. Under Carter, Georgia was the first state to institute it. Texas Instruments exec Peter Pyhrr had used ZBB and Carter hired Pyhrr to implement ZBB in Georgia.

What the results both in Georgia and during Carter’s term as president were is a judgment call that is often determined by the political inclinations of the person making the judgment. In his history of economic policy during the Carter administration, Anthony Campagna later wrote, “The highly touted budgetary innovation gradually faded away when actually employed; the Carter aim to rationalized budget-making was given a trial and found wanting, and has since disappeared from view.” He attributed this in part to federal officials learning to work the system under ZBB just as they had under more traditional systems.

Humorist Dick West once wrote of the Carter effort, “This is also known as zero-based hyperbole,” referring to federal officials having to justify their budgets.

Even in Georgia, ZBB remained, and remains, controversial. Gov. Sonny Perdue (2003-2011), a Republican, opposed ZBB and vetoed legislation designed to implement it. “A survey of states finds that of the states that currently maintain this methodology in their statutes all have effectively abandoned the practice because of the additional bureaucratic process and overhead while producing few identifiable results,” he wrote in the veto message, which also called SBB a threat to separation of powers, a concern of Sheriff DeMeo. On the other hand, Perdue’s successor, Republican Nathan Deal, supports ZBB because he believes it “will ensure every taxpayer dollar spent is justified and accounted for each year.”

Among the drawbacks that public administration experts have identified with ZBB are that it is more time-consuming and expensive than traditional budgeting, that training is required to know how to do it, that accumulation of information used to justify budgets can clog the functioning of agencies. They also say that it’s not for programs like prisons or education that are seen as central, ongoing functions of government (law enforcement?).

In these pages, Mark Waite wrote of Sheriff DeMeo’s concern about separation of powers: “District Attorney Brian Kunzi called the separation of powers argument ‘an amusing comment.’ He said the sheriff is part of the executive branch.”

This is a common response for those who regard the federal government, which has only one executive branch, as the ONLY model. But at the federal level, only the president and vice president are elected. It’s not a model that works at the state and local government level where there are many executive branches. In Nevada state government, for instance, there are six elected officials (governor, lieutenant governor, secretary of state, treasurer, controller, attorney general) and a separation of powers between each of them. In addition, the Nevada Supreme Court has ruled that the Nevada Board of Regents has powers of its own that are protected against the rest of state government (Ralph King vs. Board of Regents, Nov. 17, 1948).

The sheriff may be right or wrong about zero-based budgeting, but the issue is a good deal more complicated than his critics concede.

Dennis Myers is an award winning journalist who has reported on Nevada’s capital, government and politics for several decades. He has also served as Nevada’s chief deputy secretary of state.

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