If you haven't already, you're soon to hear a lot about a new term, one that the new Grand Traverse County commissioners intend to live by. Call it "results-based budgeting" or "budgeting for outcomes" or "performance-based budgeting," but regardless of its moniker, it's soon to be the prevailing thinking at the county.

So what's the thinking behind the concept, and what does it mean for county residents? 

Meet Mike Mucha, the director of the Research and Consulting Center for the Government Finance Officers Association, who recently signed an $8,000 contract to guide the county through its new budgeting process. Mucha explains that unlike a traditional or “incremental” approach to budgeting – where the county takes last year’s budget and makes adjustments up or down based on revenue projections – results-based budgeting starts by gathering employee and public input on priorities for county services, then structures spending around those services.

“We’re talking about a fundamental shift in the way the organization approaches the budget,” explains Mucha. “Rather than a traditional line-item budget… you have a set of goals with price tags. You (create) a strategic plan that describes the costs of programs and services, and what you expect to get for the dollars you spend on those programs and services.”

The process requires assigning price tags to every county service – what’s the value of the parks department? How do you measure the ROI of county recycling programs? Then performance standards to measure department outputs are established. Budget funding cuts (or boosts) are made based on how well a program is performing against expectations, assuming the service continues to be a community priority. Some programs are state-mandated and can’t be cut completely – like soil erosion, health services and public records – but the process can unveil opportunities for efficiencies, says Mucha.

So what’s the downside? Some experts who spoke to The Ticker about results-based budgeting cited two major challenges: time and cost. Retiring Bay Area Transportation Authority Executive Director Tom Menzel – who used results-based budgeting to financially turn around both BATA and the National Cherry Festival – says the process is “very labor-intensive…and not always cheap.” Breaking down an entire organization’s budget into individual pieces, assigning value to those pieces and then implementing performance standards to measure efficiency requires significant administrative time and cost, says Menzel. The success of the process also hinges on employee buy-in.

“You’ll get cultural attempts to sabotage the process, because you’re putting accountability into a system that’s not used to it, especially in the public sector,” says Menzel. “You have to make sure people really understand the rationale for it – the consequences and the benefits. It’s not easy…but it can also build you a better system that has stability and security for the future.”

Former Grand Traverse County Administrator Dave Benda cites “time and money and effort” as concerns he had about results-based budgeting. “They’ll find out in the implementation stage…it’s going to cost money, and it’s labor-intensive,” he says.

Mucha acknowledges the process “takes a lot of time.” But the consultant says that rather than “maintain a status quo type of management,” results-based budgeting offers an opportunity to “hold big government accountable for results.” County commissioners have cited that accountability as a key reason they’re pursuing the process.

“The current budget process has left the county facing massive debt, and, if continued, will force severe cuts in services,” Commissioner Christine Maxbauer wrote in an email to The Ticker. “Results-based budgeting will help public leaders deliver the outcomes citizens value, even as budgets are cut.” Noting that results-based budgeting is “citizen driven, not department driven,” Maxbauer says commissioners - who will soon begin working with GFOA to create a strategic plan for implementing the new budget process - will also launch employee and community engagement efforts in the coming weeks.

As for what the county will look like after going through results-based budgeting, Maxbauer offers her ideal vision: “Fiscally sound, with an engaged workforce that can provide results that really matter to our community."