State Budget Offices Promote Data-Driven Decision-Making

As state governments continue to face reduced revenues as a result of the COVID-19 pandemic, budget directors and budget office staff need to focus on funding effective programs that meet increasing community needs. Some state budget offices across the country are doing this by using evidence-based policymaking—relying on data gathered from rigorous evaluation—to make spending decisions in these difficult times.

Budget offices are central to state efforts to use evidence because they can incentivize or require agencies to include data and other relevant information in budget submissions for new or expanded programs. These offices also can help agencies increase their capacity to understand and use evidence by training staff, funding additional program evaluations, and defining terms so the agencies have a common framework for their work.

Now, through a peer-learning community established by The Pew Charitable Trusts, state policymakers are formalizing relationships with one another to share best practices, troubleshoot common challenges, and develop new ideas. This growing community of state leaders includes elected officials, legislative staff, budget office directors and staff, gubernatorial appointees, and agency staff.

Many learning community members, such as budget officials from Colorado, North Carolina, and Minnesota, have already achieved results through investments in evidence. Their efforts can help guide others on what is possible when state leaders focus on rigorous data to make budget decisions.

In Colorado, Lauren Larson leads the state’s Office of State Planning and Budgeting (OSPB), which develops the governor’s annual budget request and forecasts state revenue. Larson, the Colorado budget director, and her team advance evidence-based policy by training agency staff members in its use and requiring that supporting data be submitted with budget requests. Her office also provides detailed guidance in budget instructions, awards grants to agencies to evaluate programs, and requests funding for evaluations within standard program costs. Larson's resume includes nearly a decade in Washington, D.C., with the White House Office of Management and Budget, where she served as chief of the Treasury Branch under Presidents George W. Bush and Barack Obama.

With support from Pew, OSPB in 2019 developed and implemented a decision-making tool called the evidence meter. The tool plots both the number and rigor of program evaluations based on the level of evidence being used in decisions by the governor and the General Assembly. Using this tool and the strategies described above, OSPB and agency partners have helped Colorado direct over $130 million to more effective programs.

In North Carolina, Charlie Perusse serves as state budget director, heading the Office of State Budget and Management (OSBM). Since 2017, Perusse has sought to build a culture of excellence in state government and worked collaboratively with agencies to incorporate data and evidence into the budgeting process in key ways.

First, OSBM established formal definitions of tiers of evidence in 2018 to create a common language for understanding the concept across agencies. Second, OSBM revised instructions for budget requests to encourage greater emphasis on the use of data to justify proposals for new or expanded programs. Finally, the office has focused heavily on training to build agency capacity for using evidence to manage programs and operations, an approach that then informs each year’s budget cycle.

In Minnesota, Pete Bernardy serves as enterprise director for results management at Minnesota Management and Budget (MMB) and teaches graduate courses in program evaluation. Before joining state government, he led a team at the U.S. Department of Health and Human Services that evaluated the spending of $900 billion a year by the agency.

Since 2015, MMB has completed program inventories and benefit-cost analyses in a wide range of policy areas, including criminal justice, child welfare, higher education, public health, mental health, and substance use disorder. For example, the agency inventoried and assessed 118 substance use prevention and treatment programs in 2017 and found that a majority had been proved either effective or promising.

In response, the state directed funding toward proven programs, such as an additional $15.2 million for the Opioid and Other Drug Abuse Prevention program in fiscal year 2020-21. That extra funding helps expand access to naloxone, a medication found to reduce deaths from opioid use.

The analysis also highlighted gaps in service delivery, particularly in treatment and recovery options for rural communities. MMB found that upfront investments in substance use prevention efforts could help avoid some of the significant costs associated with opioid misuse, such as those for treatment or emergency room visits.

In addition, MMB created “evidence forms” for agencies to use to provide detailed descriptions of the data and other information (such as evaluations) supporting their funding requests. Working with agencies, Bernardy’s team has demonstrated that states can quickly assess what they are doing well and determine ways to further incorporate the findings from rigorous evaluations into their work.

These state champions highlight how budget offices can encourage agencies to prioritize evidence when making budget requests and ensure that state governments have the capacity and framework to make data-driven decisions. Collaboration among decision-makers from various states can help to build and sustain evidence-based policies and practices, especially at a time of economic and health crises.

Sara Dube is a project director and Alex Sileo is a senior associate with the Results First initiative.