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Greg	
  Wass,	
  CTO,	
  State	
  of	
  Illinois	
  
05.06.2014	
  
Budgeting	
  for	
  Results	
  and	
  
Paying	
  for...
1.	
  	
  Background	
  
•  Serves	
  a	
  population	
  of	
  nearly	
  
13	
  million	
  
•  Annual	
  operating	
  budget	
  =	
  $66	
  
billio...
•  Annual	
  ICT	
  spend	
  =	
  $500	
  
million	
  ($300m	
  centrally)	
  
•  750+	
  ICT	
  employees	
  (500	
  
cen...
•  53,000	
  violent	
  crimes	
  annually	
  
•  332,000	
  property	
  crimes	
  
•  1,000	
  deaths	
  each	
  year	
  ...
•  Recession	
  reduced	
  income	
  tax	
  revenues…	
  
•  …and	
  increased	
  demand	
  for	
  state	
  gov’t	
  servi...
7	
  
•  Temporary	
  income	
  tax	
  increase	
  $4	
  billion	
  (to	
  1.1.15)	
  
•  Reduced	
  Medicaid	
  spend	
  $1.6	
...
•  Taxpayers’	
  budgets	
  are	
  tight	
  
•  Government	
  has	
  to	
  “do	
  more	
  with	
  less”	
  
•  Demand	
  f...
•  Incremental	
  budgeting	
  
•  Line-­‐item	
  budgeting	
  
•  Perpetual	
  grant	
  and	
  contract	
  renewals	
  
•...
2.	
  	
  Budgeting	
  for	
  Results	
  
•  Passed	
  by	
  GA	
  and	
  signed	
  by	
  the	
  governor	
  
•  Defined	
  as	
  “a	
  method	
  of	
  budgeting	
  ...
Every	
  program	
  supports	
  a	
  key	
  outcome	
  
Area Outcome
Education Improve School Readiness and Student Succes...
Current	
  general	
  funds	
  allocation	
  
14	
  
12,551	
  
5,123	
  
6,804	
  
2,955	
  
0%	
   20%	
   40%	
   60%	
...
School	
  
Readiness	
  
Effective	
  
Teachers	
  and	
  
Leaders	
  
#	
  new	
  National	
  
Board	
  Certified	
  
teach...
•  60	
  agencies	
  under	
  the	
  governor	
  
•  450	
  programs	
  
•  A	
  minimum	
  of	
  one	
  indicator	
  per	...
Strategic	
  
Planning	
  
Performance	
  
Management	
  
BUDGETING	
  
for	
  RESULTS	
  
Program	
  
Budgeting	
  
BFR	
...
Strategic	
  
Strategy	
  maps	
  
Logic	
  models	
  
BFR	
  Commission	
  
	
  
(2010-­‐present)	
  
Structural	
  
Chie...
•  Pilot	
  project	
  
•  Funded	
  by	
  MacArthur	
  &	
  Chicago	
  Community	
  Trust	
  
•  Developing	
  evaluation...
•  Download	
  /	
  analyze	
  the	
  performance	
  data	
  
•  data.illinois.gov	
  &	
  budget.illinois.gov	
  
•  Atte...
3.	
  	
  Pay	
  for	
  Success	
  
•  A	
  “special	
  case”	
  of	
  budgeting	
  for	
  results	
  
•  New	
  type	
  of	
  performance-­‐based	
  contract...
PFS:	
  	
  a	
  model	
  
Illustration	
  by	
  
Dan	
  Stiles	
  
from	
  Harvard	
  
Magazine,	
  
July	
  2013	
  
23	...
•  Reviewed	
  existing	
  state	
  &	
  city	
  projects	
  (UK,	
  US)	
  
•  Surveyed	
  state	
  agencies	
  for	
  id...
•  Serve	
  youth	
  ages	
  13-­‐17	
  with	
  current	
  and	
  simultaneous	
  
involvement	
  in	
  the	
  child	
  we...
Majority	
  of	
  dually-­‐involved	
  youth	
  are	
  13-­‐17	
  
26	
  
•  Ensure	
  outcomes	
  are	
  aligned	
  with	
  child	
  wellbeing	
  
and	
  long-­‐term	
  system	
  improvements,	
 ...
Example	
  performance	
  indicators	
  
28	
  
Provide	
  wraparound,	
  evidence-­‐based	
  interventions	
  
29	
  
@gregorywass	
  
Contact	
  me:	
  	
  greg.wass@illinois.gov	
  
Thanks!	
  
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Budgeting for Results and Paying for Success in State Government 5.6.14

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My presentation for Big Data Week 2014 (livestreamed from Chicago on 05.06.2014) on how the State of Illinois is using data to drive governmental decisionmaking at the enterprise and individual program levels.

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Budgeting for Results and Paying for Success in State Government 5.6.14

  1. 1.   Greg  Wass,  CTO,  State  of  Illinois   05.06.2014   Budgeting  for  Results  and   Paying  for  Success  in  State  Government  
  2. 2. 1.    Background  
  3. 3. •  Serves  a  population  of  nearly   13  million   •  Annual  operating  budget  =  $66   billion   •  50,000  state  employees   •  Nearly  7,000  units  of  local   government  (#1  in  the  U.S.)   •  $12.7  billion  annual  Medicaid   spend,  serving  more  than  3   million  people  (after  ACA)     Illinois  state  government:    by  the  numbers   3  
  4. 4. •  Annual  ICT  spend  =  $500   million  ($300m  centrally)   •  750+  ICT  employees  (500   centrally)   •  7900  datasets  on   data.illinois.gov  (includes   some  federal)   •  8000  customers  of   Illinois  Century  Network   Illinois  state  ICT:    by  the  numbers   4  
  5. 5. •  53,000  violent  crimes  annually   •  332,000  property  crimes   •  1,000  deaths  each  year  from  motor  vehicle  accidents   •  16,000  teen  births   •  2.1  million  public  school  students   •  Below  50%  proficiency  in  11th  grade  reading  &  math   •  More  than  80%  juvenile  recidivism  (3  year  re-­‐arrest   rate)   *All  data  from  Illinois  state  agency  sources.   Big  city  /  big  state  issues:    Illinois  data*   5  
  6. 6. •  Recession  reduced  income  tax  revenues…   •  …and  increased  demand  for  state  gov’t  services   •  Collective  bargaining  agreements   •  Pension  costs   •  Healthcare  costs  (Medicaid,  group  insurance)   •  Consent  decrees   •  Pew  Center  ranked  Illinois’  finances  among  10  worst   Illinois  was  in  a  precarious  fiscal  position   6  
  7. 7. 7  
  8. 8. •  Temporary  income  tax  increase  $4  billion  (to  1.1.15)   •  Reduced  Medicaid  spend  $1.6  billion  annually   •  Cumulative  cost  reductions  of  $5.7  billion   •  Major  pension  reform  passed  (but  blocked  by  court   challenge)   •  Backlog  of  old  bills  reduced  from  $10  billion  to  $5b   •  Governor  proposed  extending  income  tax   •  5-­‐year  fiscal  stabilization  plan  (incl  current  on  bills)   Spent  past  5  years  digging  out   8  
  9. 9. •  Taxpayers’  budgets  are  tight   •  Government  has  to  “do  more  with  less”   •  Demand  for  more  accountability  and  transparency   •  Government  should  be  run  “like  a  business”   •  Diminishing  willingness  to  fund  social  programs,  at   the  same  time  as  needs  &  mandates  are  increasing   People  expect  /  want  more  from  gov’t   9  
  10. 10. •  Incremental  budgeting   •  Line-­‐item  budgeting   •  Perpetual  grant  and  contract  renewals   •  Bad  habit  of  deferring  costs  (esp.  pensions)   •  Lack  of  performance  management  culture  (incl.  data-­‐ driven  decisionmaking)   Diagnosing  Illinois’  fiscal  problems   10  
  11. 11. 2.    Budgeting  for  Results  
  12. 12. •  Passed  by  GA  and  signed  by  the  governor   •  Defined  as  “a  method  of  budgeting  where  each   priority  must  be  justified  each  year  according  to   merit  rather  than  according  to  the  amount   appropriated  for  the  preceding  year.”       Budgeting  for  Results  –  IL  P.A.  96-­‐958  (2010)   12  
  13. 13. Every  program  supports  a  key  outcome   Area Outcome Education Improve School Readiness and Student Success for All Economic Development Increase Employment & Attract, Retain and Grow Businesses Public Safety Create Safer Communities Improve Infrastructure Human Services Meet the Needs of the Most Vulnerable Increase Individual and Family Stability and Self-Sufficiency Healthcare Improve Overall Health of Illinoisans Environment and Culture Strengthen Cultural & Environmental Vitality Government Services Support Basic Functions of Government 13  
  14. 14. Current  general  funds  allocation   14   12,551   5,123   6,804   2,955   0%   20%   40%   60%   80%   100%   Educa2on    (incl  pension)   Economic  Development   Public  Safety   Human  Services   Healthcare   Nature,  Culture  and  Environment   Government  Services  (incl  pension   &  group  health)   62   ($  in  millions,  FY13)  
  15. 15. School   Readiness   Effective   Teachers  and   Leaders   #  new  National   Board  Certified   teachers   Meet  Needs  of   Most  Vulnerable   Comprehensive   Care   Coordination   #  transfers  from   institutions  to   community  care   Examples  of  data  hierarchy:   from  desired  outcomes  to  program  measures   15  
  16. 16. •  60  agencies  under  the  governor   •  450  programs   •  A  minimum  of  one  indicator  per  program  (FY15)   •  Focus  on  outcomes  not  activities   •  But  get  in  the  habit  of  reporting   •  Continuous  improvement   •  Produce  lots  more  information  about  programs   •  Use  data  to  drive  budget  decisions   BFR  scope  and  principles   16  
  17. 17. Strategic   Planning   Performance   Management   BUDGETING   for  RESULTS   Program   Budgeting   BFR  incorporates  three  disciplines   17  
  18. 18. Strategic   Strategy  maps   Logic  models   BFR  Commission     (2010-­‐present)   Structural   Chief  Results  Officers   IPRS  quarterly  data   Budget  book   Approps  hearings   (2012-­‐present)   Evaluative   Pilot  project   (Education)   Foundations   State  data  unit   (2014-­‐forward)   Implementing  BFR:    3  workstreams   18  
  19. 19. •  Pilot  project   •  Funded  by  MacArthur  &  Chicago  Community  Trust   •  Developing  evaluation  methodology   •  Analyzing  50  programs  in  one  outcome  area   •  Additional  “sub-­‐outcomes”   •  Research  evidentiary  basis  for  program  effectiveness   •  Measure  cost  per  outcome   •  Comparative  analysis  of  programs   Developing  a  program  evaluation  framework   19  
  20. 20. •  Download  /  analyze  the  performance  data   •  data.illinois.gov  &  budget.illinois.gov   •  Attend  BFR  Commission  (monthly  public  meetings)   •  Attend  public  hearings  this  summer   •  Later  in  2014:    we  publish  KPIs  on  interactive  site   How  to  get  involved?   20  
  21. 21. 3.    Pay  for  Success  
  22. 22. •  A  “special  case”  of  budgeting  for  results   •  New  type  of  performance-­‐based  contract   •  Applies  to  social  issues  that  need  large  upfront   investments  to  get  results   –  Children’s  health  (e.g.,  birth  weight,  asthma)   –  Early  childhood  education   –  Adult  and  juvenile  recidivism   –  Social  determinants  of  health  incl.  supportive  housing   –  Homelessness   Pay  for  success  AKA  social  impact  bonds   22  
  23. 23. PFS:    a  model   Illustration  by   Dan  Stiles   from  Harvard   Magazine,   July  2013   23  
  24. 24. •  Reviewed  existing  state  &  city  projects  (UK,  US)   •  Surveyed  state  agencies  for  ideas  &  enthusiasm   •  Working  with  10  other  states  and  Harvard  SIBlab   •  Announced  first  contract  award  in  the  area  of   improving  outcomes  for  dually-­‐involved  youth   •  Will  do  more;  in  the  five-­‐year  fiscal  stabilization  plan   Illinois  contemplated  >25  ideas  for  PFS   24  
  25. 25. •  Serve  youth  ages  13-­‐17  with  current  and  simultaneous   involvement  in  the  child  welfare  and  juvenile  justice   systems,  entering  through  either  system   •  Include  youth  in  urban  and  rural  communities  from   across  the  state     •  Divert  newly  dually-­‐involved  youth  and  step-­‐down   current  dually-­‐involved  youth     •  Serve  enough  youth  to  allow  for  meaningful  evaluation     *  Youth  in  substitute  care  with  DCFS  with  at  least  1  day  in  detention  or  IDJJ/DOC     PFS  for  dually-­‐involved  youth*   25  
  26. 26. Majority  of  dually-­‐involved  youth  are  13-­‐17   26  
  27. 27. •  Ensure  outcomes  are  aligned  with  child  wellbeing   and  long-­‐term  system  improvements,  and   correlated  with  taxpayer  cost  savings     •  Payments  should  be  based  on  reduction  of  negative   outcomes  and  achievement  of  positive  outcomes     •  Keep  payment  metrics  simple  and  few     •  Allow  for  a  rigorous  evaluation  methodology     How  to  determine  success  payments   27  
  28. 28. Example  performance  indicators   28  
  29. 29. Provide  wraparound,  evidence-­‐based  interventions   29  
  30. 30. @gregorywass   Contact  me:    greg.wass@illinois.gov   Thanks!  

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