The Massachusetts Senate took an important step to improve the efficiency of state government Thursday by approving a bill that would overhaul the commonwealth’s finance laws and establish a performance-management system for state agencies.

Passage of the AIM-supported measure was unanimous.  The legislation would require Massachusetts governors to file a “zero-based budget” at the start of their administrations and force the state to publish online the full text of business-impact statements for new regulations.

“The legislation requires the commonwealth to use the same management tools that private employers have used for decades to improve efficiency. Senate President Therese Murray and the members of the Senate deserve tremendous credit for seeking to make Massachusetts work efficiently for all of its citizens,” said John Regan, Executive Vice President of Government Affairs at AIM.

The bill’s provisions include:

• Sunset Review Commission – Charged with reviewing the operations of all state agencies and authorities, considering the need for each agency and, if necessary, recommending a sunset date.
• Performance Management – Requires executive offices and the State Lottery Commission to implement performance-management strategies to facilitate evaluation and enable better programmatic decision-making.
• Cash Flow Reports – Improves the commonwealth’s cash-flow reporting. Quarterly cash flow reports would have to compare actual spending and revenue with estimates previously made for that period, and analyze possible reasons for variances.
• Local Aid – Distributes unrestricted local aid (general government aid, chapter 70 aid and payments in lieu of taxes) monthly rather than quarterly, starting in Fiscal Year 2013.
• Program versus Maintenance budget – Eliminates statutory requirements that a “maintenance budget” be developed.  Many The starting point for any state budget is to preserve existing programs and agencies.  That starting point is at odds with a more modern notion of budgeting that the commonwealth should continuously evaluate agencies and programs for performance, and invest in the higher-performing programs.”
• Full impact statements posted to the web –Requires the Secretary of the Commonwealth to post the full text of a business impact statement already produced by an agency rather than simply an overview.

The bill now goes to the House of Representatives.