The document outlines Illinois' fiscal challenges and efforts to reform state budgeting through a model called 'Budgeting for Results' and the introduction of performance-based contracts known as 'Pay for Success'. It highlights the state's population, demographics, budget allocations, and issues including violent crime rates and education challenges. The initiatives aim to improve accountability, transparency, and the effective allocation of resources to achieve desired outcomes in various sectors, such as education and public safety.

1.
Greg
Wass,
CTO,
State
of
Illinois
05.06.2014
Budgeting
for
Results
and
Paying
for
Success
in
State
Government

2. 1.
Background

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. • 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. • 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. • 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

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. • 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. • 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. 2.
Budgeting
for
Results

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. 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. 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. 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. • 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. Strategic
Planning
Performance
Management
BUDGETING
for
RESULTS
Program
Budgeting
BFR
incorporates
three
disciplines
17

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. • 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. • 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. 3.
Pay
for
Success

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. PFS:
a
model
Illustration
by
Dan
Stiles
from
Harvard
Magazine,
July
2013
23

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. • 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. Majority
of
dually-­‐involved
youth
are
13-­‐17
26

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. Example
performance
indicators
28

29. Provide
wraparound,
evidence-­‐based
interventions
29

30. @gregorywass
Contact
me:
greg.wass@illinois.gov
Thanks!