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NLPES Site Map

2002 NLPES Surveys

Coping with recent budget challenges:  How, if at all, have your office’s budget and staffing been affected by the recent economic downturn?  What specific steps have you taken (or have been imposed upon you) to respond to these budget challenges?  Have lean economic times had an impact on your office’s work products?

Tom Sykes, Washington Joint Legislative Audit Review Commission

The current recession has had a heavy impact on Washington State, which has one of the highest overall unemployment rates in the nation.  This means that our budget writers are increasingly constrained by current and forecasted shortfalls in revenue.  At JLARC, we have taken some cuts in that portion of our resources provisoed for one-time studies, which has meant restraints on more discretionary areas of our own spending—purchases, travel, equipment.  We have also restructured our staff organization, developing a flatter, less hierarchical model.  However, our current biennial Work Plan has the largest number of projects scheduled, covering the broadest range of topic areas, in recent memory.  Our mandated studies—and the evaluation topics and questions we build into them—have a more purposeful and self-conscious fiscal focus.

Yes, our budget and by implication our staffing have been adversely affected by the economic downturn.  When the biennial budget was passed in the summer of 2001, budgets were reduced, and then in the aftermath of September 11, the estimated shortfall for the State grew to over $1 billion, and executive and legislative agencies were asked to further reduce their budgets.  As a result, in FY 01-02, we were expected to reduce our GPR operating budget by a total of $371,600; this is the equivalent of an 8 percent reduction of our base of $4.4 million.  To achieve this reduction, beginning in November 2001, we instituted a hiring freeze, froze salaries, and ceased all discretionary travel and external training for the remainder of the fiscal year.  The impact on our office's work products will ultimately relate to quantity, not quality.  As a result of the budget reduction measures, the Program Evaluation Division had three vacancies in November 2001, and those have remained unfilled; another four staff members will have left the Bureau by the time the fiscal year ends on June 30, and because the magnitude of budget reductions for the second year of the biennium is not known, there are no immediate plans to fill those positions.  With this many fewer staff, fewer audit teams can be assembled and fewer audit reports will be prepared.

Our state experienced a significant shortfall during FY 01-02 that resulted in across-the-board midyear cuts of more than 4% for most agencies, including ours.  Our budget for 02-03 is 4.3% less than our previous budget.  We have done a number of things to reduce costs during the past year.  Most significant was reducing our office space by 1/3, which allowed us to realize an annualized savings of $31,000.  We have reduced travel expenses by allowing no out-of-state travel and limiting in-state travel to that which is absolute necessary to complete audits.  We also reduced the number of telephone lines we lease by four, and also reduced expenses for printing, copying, insurance, etc.  We are also not replacing one staff member who has just retired.  Our priority in making cuts was to cut everything except audit-related expenses.  As a result, the reductions have not impacted our work products.  However, with fewer staff we will be able to complete less work, which is indeed an unfortunate effect of the budget situation.

Our office, along with all other state agencies, received a 6% mid-year budget cut in the fall of 2001.  This required us to freeze several new positions that we had received for our Sharpening the Pencil program that reviews Florida school districts, and we had to postpone several of these reviews.  We also froze out of state travel and cut allocations for other expenses.  Funding for the positions was largely restored by the 2002 Legislature.  We have continued to stress identifying potential cost savings in all of our studies, which has helped the Legislature target some of its needed spending cuts in programs.

Our office's budget has been reduced by three percent for FY 2002, seven percent for FY 2003, and eight percent for FY 2004.  As a result of these cuts, we did not fill several vacancies that occurred when several JLARC staff left to fill senior positions in the new gubernatorial administration.  We are asking fewer people to work harder to produce superior work products.

Our office has had severe budget problems before the economic downturn, that of course, have worsened.  We have had to work with several positions unfilled.  We have reduced the number of reports we produce and streamlined some of our other work.

Under the current budget our office does not have any improvements for additional computer resources or new positions.  We can fill vacant positions.  Incentives, such as giving raises for multiple professional certifications and for finishing the 6-month probation period, have been reduced.  We have explored ways to reduce costs by printing fewer reports since they are available on our web site.

Our office has always made a concerted effort to be fiscally responsible but because of recent budget shortfalls statewide, we've redoubled our efforts.  Although we are not technically subject to the same budget constraints/cutbacks that have been imposed upon the executive branch, we try to mirror them whenever possible.  For example, our office has accepted a 1 percent across-the-board spending reduction for Fiscal Year 2002 and a 2.5 percent reduction for Fiscal Year 2003.  We are also abiding by a 4 percent restriction of our general fund appropriations for Fiscal Year 2003, in case state revenues continue to fall short of expectations.  With regard to the impact on our office's work products, I'd say it has been minimal.  Over a year ago we started disseminating more of our reports in an electronic format, which has saved us some report printing and postage expenses.  Further, our workload has not decreased as a result of budget problems—we are still doing the same number of audits (or maybe more!).

Like most other states, our office has been affected by the recent economic downturn.  Although we have avoided staff layoffs, we have proactively taken steps to respond to the budget challenges.  For example, we have significantly reduced staff travel, dues and subscriptions, and outside training; several of our staff have also volunteered to participate in a reduced work schedule in recent months.  Although there has been no impact on the quality of our work products, obviously the quantity of those work products is impacted by reduced work schedules.

In anticipation of a biennial budget reduction of up to 10%, we cut our budget by a like amount and voluntarily froze most new hiring.  Subsequently, the Legislature imposed a hiring freeze through mid-2003, but our budget cuts were significantly less than expected.  Nevertheless, we still have cut back on discretionary spending in areas like training, travel, subscriptions, etc.  Our reduced staff and inability to hire most temporary staff has reduced the number of studies we will do this year by about 15% (one study).

Our FY 02 budget was reduced through a negative supplemental appropriation by about 4%, the same as most state agencies.  Our initial FY 03 appropriation is about 2% less than our reduce FY 02 budget.  We have contended with this by hiring lags, reduced use of consultants, and not strictly adhering to our schedule for upgrading computers and software.  Thus far lean economic times have been relatively painless.  For the long haul however, we may have to reduce our use of consultants and the hours of some support staff.

We've held open one position we otherwise would have filled.  We haven't experienced an impact on our work product, and don't expect to.  If we have to hold the vacant position open, or would have to lay off anybody, that would impact the volume of work we could produce.  For FY 03, we took a hit of about $86,000 out of a $1.8 million budget.

Budget strategies have been discussed with the legislative agencies as a whole.  Contracted services and unspent appropriation authority have been identified as options for cuts to meet General Fund shortfalls.  Across the board cuts for all agencies of 3 to 7% are also being tossed around.  Staffing and office work has not been impacted.

We haven't been impacted directly, but it makes it hard to have report recommendations that would cost much money.  Recently we debated whether to have a recommendation to fund a program using a dedicated source of funding that now just goes to the General Fund pot.  I don't know what we would have done two years ago, but given the current situation we didn't make the recommendation.

So far, the recent economic downturn has not significantly affected our budget.  Like other Texas state agencies, we have been asked to identify ways to reduce spending wherever possible.  We are, of course, doing so.  But with a relatively small agency, our budget is driven primarily by staff salaries and we have not cut staff.  If we lose staff between now and the legislative session next year, we will likely not fill those positions until after the session.  This approach, however, is standard for Sunset.  Once we get to a certain point in our biennial cycle, replacing staff is not cost effective and we strive to save those salary dollars.  All in all, the budget situation has not affected our work or our work product.  The revenue estimators still project our two-year state budget to be balanced as a result of conservative revenue estimates used in creation of the budget.  The 2004-2005 budget to be developed next year may be another matter and will likely be much tighter.  Hopefully, our role in finding efficiencies will allow us to receive sufficient budget dollars to effectively continue that work.

So far, our budget has not been affected by the recent economic downturn, and we do not expect it to be affected in the coming fiscal year.  Nonetheless we have voluntarily taken steps to reduce our spending.  Such steps include allowing fewer staff to attend out-of-state conferences, more closely scrutinizing purchase and training requests, and hiring just to fill vacancies rather than expanding staff size.  Because we have not been subject to the budget reductions that so often accompany lean times, there has been no impact on our work products.

As of June 2002, our office's staffing, operations, and work product have not changed appreciably due to the recent economic downturn.  The Legislature made budget cuts twice in the last year: during a special session in the fall of 2001, as well as during this year’s regular session.  Even more substantial cuts are expected during a July 2002 special legislative session.  It is too early at this point to determine what effects those reductions will have on our office, but, with this third round of cuts, we are likely to see some (possibly dramatic) effects.

We have had to leave two staff auditor positions unfilled.  Also, we have had to reduce our travel expenditures and postpone replacing computers.

The economic downturn has impacted staffing at the Texas State Auditor’s Office (SAO).  The pool of applicants for jobs at the SAO has increased due to layoffs in the private sector and the SAO’s turnover rate has slowed.  The larger pool of applicants has also provided the SAO with more experienced staff, which has benefited the organization.  Overall, there has been less tax revenue to the state due to the economic slowdown, and there is now an increased awareness of how state entities spend money.  The economy has not affected the number of reports we publish.

The number of staff getting raises and the amount of raises for FY 2003 have been reduced.

We have a hiring freeze in place.  We can replace people but not hire any additional staff.  We have also had to freeze wages for this fiscal year.

Budget and staffing have not been affected, nor have our work products.  We have voluntarily suspended out of state travel for the time being.

N/A [Wyoming's economy often seems to be on a cycle of its own; the legislature has not reduced our section's budget or staffing.]

Out-of-state travel reduced.  No [impact on our office’s work products].

Budget not much changed.  Staffing not affected.

Our current operations have not been impacted by the recent economic downturn.  Funding available for raises and promotions has been reduced but not drastically.

We have not faced any major setbacks in staffing because of budget constraints.  However, we will be faced with these issues in the next couple of years.

Luckily, PEER's appropriations over the last several years have not suffered much because of the nation's and state's economic downturn.  In fact, PEER's FY 2003 budget (which began on July 1) is approximately $50,000 greater than the FY 2002 budget.  The number of PEER staff has remained relatively constant at 29 positions.  Several years ago, PEER had a total of 31 positions, but 2 positions were cut as a budget reduction measure.  Despite the stability of PEER's budget and staffing level, we probably would not immediately fill a vacant evaluator position.  We would use those salary funds as a cushion in our budget.  The lean economic times have not directly affected our workload or the types of projects requested of our Committee.  The primary affect has been requests from several legislative committees to help them identify additional revenues or expenditure reductions for certain agencies and programs.

So far the only affect we have is the inability to ask for new staff in the upcoming budget hearings.

New Mexico has not experienced the budget problems that other states have.  However, the appropriations made for fiscal year 2003 did not include salary increases for state employees.

Although the state has experienced a revenue shortfall, our agency has not been impacted in any way at this time.

Our budget and staffing have not really been affected by the recent economic downturn.

Our office, like other state agencies, has been required to limit hiring, reduce travel expenses where possible, defer major purchases, and cut spending by 6%. These restrictions prevent us from filling one staff vacancy. One less staff person has the potential to slow down completion of studies, and as a result, may affect the office’s ability to meet deadlines. The travel restrictions limit participation in professional development opportunities, such as conferences and seminars, taking place in other states.