Budgeting involves the allocation of resources to an action plan for a specific period of time. Some governmental entities use priority-based budgeting, or PBB, as a tool to align revenue expenditures more closely with community values. PBB is different from traditional budget approaches that use previous year's costs as a basis for developing successive budgets. PBB is a more flexible budgeting system that evaluates the ultimate goals of communities and focuses on funding objectives and activities that support these end results.
Government budget limits are generally set by revenue from taxes, fees and other charges. Because prior budget allocations do not serve the basis for priority-based budgeting, alternative approaches can be pursued to deliver the outcomes sought by citizens. Resources are allocated to advance identified PBB objectives. Activities and tasks are prioritized to determine what is the best way of accomplishing the budget outcomes.
In priority-based budgeting, the key outcomes and expectations of citizens within a jurisdiction is the major factor used to establish funding priorities in budgets. This challenges the historical notion of established entitlements for revenue allocation based on past funding. Budgets are more flexible and not necessarily tied to past expenditures. Instead, they are prepared based on the current priorities of the taxpaying constituents. Some governments, such as Snohomish County, Washington, develop "result teams" to clearly identify community priorities prior to setting these results-driven budgets.
The main tool of PBB systems is purchasing strategies that are devised to pursue specific community-based priorities. For example, if the community seeks to improve student achievement efforts, priority-based budgeting purchasing strategies might include financing programs that enhances high school connections to colleges and career-oriented initiatives.
As a results-driven budgeting technique, performance metrics can become an integral part of PBB systems. Key success standards for funded programs are identified and evaluated at set milestones. Performance monitoring and tracking techniques assess whether priorities and expected results are being timely achieved during the budget term. This also serves as important data in developing future funding priorities.
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