In particular, this report identifies specific policy decisions that caused state agency FY 2003 budgets to be above or below what can be accounted for by inflation and population growth. The budget is a policy document that reflects priorities. By studying changes in the budget, one is able to pinpoint changes in policy priorities. To get at the effect of policy changes on the budget, it is necessary to define a "Baseline" budget. A Baseline budget is defined as a budget that reflects inflation and population growth (i.e., would maintain constant real per capita spending). In other words, a Baseline budget is one that grows as fast as the increase in the cost of living and the increase in the population being served. Thus, in this report, we identify specific policy decisions that caused state agency general fund budgets to be above or below the Baseline.
The next section of this report contains a comparison of the budgets for FY 1991 and FY 2003, followed by a short discussion of a budget reform implemented in FY 1997 called "budget redirection." A FY 2003 Baseline budget is then calculated using FY 1991 as a base year. The policy decisions that drive the agency budgets to fall above or below the Baseline budget are then highlighted. Report/Brief #84