Forget about starting from $0; Kenney shifts to different budgeting method

When Mayor Kenney was campaigning for the city's chief executive job, he often spoke about his plan to do zero-based budgeting and the savings that could come from it.

He even put a dollar figure to how much he believed could be saved by implementing the budget tool that requires all departments to start from $0 and build up their budget from scratch.

"…Through Zero Based Budgeting, Philadelphia will have $80 million to reinvest in schools or universal pre-k," Kenney wrote in his policy paper. He also tweeted: "Pension money will come from zero based budgeting like Montgomery County."

Now that he is in office, however, zero-based budgeting has been replaced with "program-based budgeting," a similar but different method for planning how to spend taxpayers' money.

"The administration intends to fulfill Mayor Kenney's vision of a 'zero-based budget' by fiscal year 2018 through the implementation of a program-based budgeting system, one that places a heavy emphasis on performance and alignment to the mayor's goals," Kenney spokesman Mike Dunn said.

While program-based budgeting can result in savings, it is not the same as zero-based budgeting.

We asked an expert on zero-based budgeting to describe the differences between the three budgeting methods that have been mentioned by the Kenney administration and the Pennsylvania Intergovernmental Cooperation Authority, which released a report yesterday advocating for performance-based budgeting.

Uri Monson, the Montgomery County chief financial officer who implemented zero-based budgeting and saved tens of millions in the county's budget, explained it this way:

The budget programs are simply tools and the methods can be combined, Monson said.

"You can do a program based budget where you start at zero, blending the two tools," Monson said. "Fundamentally they are different tools for developing and measuring a budget.  They each have their strengths and weaknesses, and fundamentally are dependent on leadership and support to be effective."

Dunn said the upcoming budget, Kenney's first as mayor, will include performance-based budgeting for new initiatives. The administration hopes to have much of next year's budget (fiscal year 2018) constructed through performance-based budgeting.

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