Lawmakers Examine Proposed Legislative Fiscal Office

Read PBPC Director Sharon Ward's Full Testimony Before House and Senate Finance Committees

State lawmakers examined a plan to create an independent legislative fiscal office today during a joint public hearing of the House and Senate Finance Committees.

Legislation enacted last year calls for the establishment of a non-partisan, bicameral legislative fiscal office (LFO) to be created by a commission consisting of the majority and minority leadership of the House and Senate, appropriations committee chairs and the Governor.

The responsibilities of the office would include:

(a) Preparing revenue estimates
(b) Establishing a baseline budget that reflects current spending levels and statutory requirements
(c) Providing analysis of the executive budget
(d) Developing models to forecast state revenue
(e) Providing an annual assessment of the state’s fiscal condition and five-year forecast
(f) Monitoring tax receipts
(g) Developing performance measures and evaluating outcomes-based performance measures; and
(h) Establishing a website

PBPC Director Sharon Ward testified at today's hearing. She provided an overview of how legislative fiscal offices operate in other states. Ward offered support for the plan in Pennsylvania but recommended some changes to the current proposal to create more budget transparency and to hold both the executive and legislative branches more accountable for budgetary decisions.

Specifically, Ward highlighted ways the office could provide the public with more information on state programs and services that will help the public better understand the budget process, the work of the legislature and the use of tax dollars.

She also observed that determining the official revenue estimate is a source of conflict between the executive and legislative branch. The current proposal suggests the General Assembly would like to expand its role in the revenue certification process, which could raise the stakes in that conflict.

One way to resolve that, Ward said, is for lawamkers to adopt a "consensus forecast" approach to setting revenue estimates for the budget, as many other states do. While the process differs across the states, many use a combination of the legislature, executive branch and independent commissions or advisors to certify revenue.

Read PBPC Director Sharon Ward's Full Testimony Before House and Senate Finance Committees