Houston Republic

Zero-based budgeting has arrived in Houston and it's a good thing though the mayor's heart isn't really in it, a free-market advocate said during a recent interview.

Zero-based budgeting will assist Houston in its ongoing financial constraints and greater need for financial transparency, Urban Reform Executive Director Charles Blain said.

"Zero-based budgeting is undoubtedly going to benefit taxpayers because even in the rare case that it doesn't produce savings, it's a great accounting tool to make sure that each of Houston's government entities within the general fund are taking a full account of their spending and being forced to justify any increases," Blain told Texas Business Coalition. "Aside from that, it's more than likely that they will find waste and excess that can’t be justified during upcoming budget hearings, but then it comes to the taxpayers to hold the administration accountable for actually cutting out that waste."

Urban Reform is a Houston-based nonprofit focused on free-market solutions to urban issues.

Zero-based budgeting, or ZBB, will require the city of Houston to analyze and justify each dollar spent rather than adding new spending to existing department budgets.

"It'll help increase transparency because we'll be able to find things like duplicative services across departments, unnecessary spending built into department budgets, and it will allow council members to easily look critically at budgets before they vote to pass them," Blain said. "Previously, they would get one session to question department heads about a vaguely presented budget. That made it hard to ask pointed and detailed questions. Zero-based budgeting will help open up that process."

Zero-based budgeting also has been embraced by Houston mayoral candidate Tony Buzbee. Last week, Buzbee said that should he be elected, he will fund his campaign's promises through cost cutting and zero-based budgeting.

Early voting is underway in the Saturday, Dec. 14 runoff between Buzbee and incumbent Houston Mayor Sylvester Turner.

Houston's adoption of zero-based budgeting began last summer.

Houston's $5.1 billion budget for fiscal year 2020, passed in June, included an amendment by Councilman Mike Knox to require city departments adopt zero-based budgeting in fiscal year 2021.

"In Houston, we passed it as a budget amendment," Blain said. "This means that when the city starts crafting the budget for FY21, departments will implement the process."

How that will happen was mentioned in the city's plan, issued by the mayor, to implement zero-based budgeting in fiscal year 2021.

Houston continues to suffer "financial constraints" and a "growing need for financial transparency," the report said.

Houston also can benefit from San Diego's experience when that city adopted ZBB in two of its department in fiscal year 2017, according to the report.

"The ZBB process requires more than starting from zero," the report said. "One of the biggest challenges the city of San Diego encountered is that their financial system is not designed to handle the ZBB process."

Collecting data from various departments that also must be trained in the ZBB process is difficult, the report said.

"Additionally, without a strong performance management structure, it is difficult for a department to know exactly where to allocate or reduce," the report said.

Department training for zero-based budgeting is not an unknown, Blain said.

"First they’ll go through trainings, and then they’ll receive standardized, itemized budget sheets," Blain said. "Then they'll move onto council workshops, which are essentially presentations by the department heads of their budgets."

Despite the plan in his name, Blain believes Turner doesn't believe zero-based budgeting will work.

"Although our current mayor ran on implementing this, it took four years and a push by council to get it done," Blain said. "And based on his rhetoric, the only reason he's even supportive of it now seems to be because he hopes it will 'prove' to ZBB proponents that it won’t produce the savings as expected."

Proponents of zero-based budgeting need to speak up, Blain said.

"Other cities might have more willing administrations that will voluntarily implement it during their budget process," he said. "If not, taxpayers need to demand it and begin to recruit council members who, too, will make a push for it."