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The traditional approach to budgeting focuses on incremental changes in detailed categories of expenditures. Performance based budgeting (PBB) differs by focusing on results rather than money spent. The basic principle of PBB is accountability, not merely on compliance with law and previous funding decisions. Performance based budgeting encourages lawmakers to reconsider priorities and grants agencies the flexibility to make decisions that are not easily permissible under traditional budgeting systems. This brief provides an overview of performance based budgeting and resources for further information.
A performance budget has the following characteristics:
Although comprehensive legislative performance budgeting is relatively uncommon—almost half of the states use performance information at some point in the legislative process—states that use performance information are similar with respect to the types of performance information used but differ in when and where the information comes into play in the budget process.
For legislators, performance based budgeting allows for:
While there are many advantages with PBB, lawmakers and legislative staff have expressed a number of concerns about the process, including:
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