In the near future, we will reintroduce Senate Bill 1222 from last session to establish zero-based budgeting (ZBB), which would require every state agency to justify each dollar of spending through intensive and recurring budget reviews. 

ZBB is a proven form of budgeting that requires justification of every dollar starting at zero. Rather than starting budget discussions at the previous year’s funding levels, ZBB asks agencies to reevaluate what they will actually need in the coming year. 

After Kellogg’s first fiscal cycle using ZBB in 2016, the $13 billion company projected a $500 million return. The success of ZBB at Kellogg’s, along with Kraft-Heinz, Coca-Cola, Unilever, Campbell Soup, Conagra, and other major corporations suggests this is one of the most effective ways to cut costs while maintaining a high level of service. 

Our bill will establish a five-year cycle by which twenty percent of all state programs will develop a zero-based budget every year. Each agency will be required to develop and submit a zero-base budget with the following components:  

• A brief description of the mission of the agency and of its discrete activities.  

• The statutory or legal justification for the agency and each activity.  

• A quantitative estimate of any adverse impacts that could reasonably be expected should activities be discontinued, together with a full-description of the methods by which the adverse impact is estimated.  

• An itemized account of expenditures that would be required to maintain agency activity at the minimum level of service required by the statutory authority, together with a concise statement of the quantity and quality of services required at that minimum level.  

• An itemized account of expenditures required to maintain agency activities at current levels of service, together with a concise statement of the quantity and quality of services being provided.  

• A ranking of all activities that shows the relative contribution of each activity at current service levels to the overall goals and purposes of the agency.  

The legislature should require more intensive reviews of state agency spending, and evaluate the necessity, benefits and contributions of state programs. We must change how we budget the people of Pennsylvania’s hard-earned money. Please join us in co-sponsoring this important legislation. 

Previous cosponsors include Senators DiSanto, Stefano, Coleman, J. Ward, Hutchinson, Rothman, Robinson, and Aument.