Landmark Mensch Bill to Implement Performance-Based Budgeting Signed into Law

Harrisburg – Landmark legislation sponsored by Sen. Bob Mensch (R-24) to require all departments and agencies to justify their budget requests beginning with dollar one was signed into law Monday.

“Pennsylvania government spending has become unsustainable, yet we continue to both fund new programs and increase funding for existing programs,” Mensch said. “I believe that through a performance-based budgeting process we can identify effective programs and get rid of the ineffective ones.”

Senate Bill 181 (Act 48 of 2017) will require the Secretary of the Budget and the director of the Independent Fiscal Office (IFO) to establish a schedule of performance-based budget reviews for all agencies at least once every five years. The reviews will include:

  • Detailed descriptions of all agency line item appropriations and programs.
  • Descriptive information and data related to existing performance measures for appropriations and programs.
  • An agency mission statement and goals and objectives for the budget year and successive planning years.
  • Any other information as the IFO may require.

Performance reviews will also be required for all state tax credit programs.

Under Senator Mensch’s legislation, performance measures must include outcome-based measures, including efficiency measures, activity cost analysis, ratio measures, measures of status improvement of recipient populations, economic outcomes or performance benchmarks against similar state programs or similar programs of other states.

The new law will also establish an independent Performance-Based Budget Board to review the budget plans developed by the IFO and to make recommendations on how each agency’s operations and programs may be made more transparent, effective and efficient.

“Performance-based budgeting is a normal occurrence in the private sector and is utilized to ensure that every dollar spent produces the desired result. I think that we should be doing the same with taxpayer dollars,” Mensch said.  “This budgeting process will call on our legislators to make some tough decisions, but we have to stop increasing the size and scope of government operation without justification.”

Senator Mensch’s most recent edition of the Mensch Report, a monthly TV show, focuses on Senate Bill 181. During the show, Senator Mensch interviewed Kevin Shivers from the NFIB, Matthew Knittel from the Independent Fiscal Office, and Gene Barr from the Pennsylvania Chamber.   (Note: This program was recorded prior to SB 181 passing the General Assembly and being signed into law on October 30.)

For more information on Senator Mensch’s legislation, visit  State updates can also be found on Senator Mensch’s Facebook at, or Twitter @SenatorMensch


CONTACT: Sarah Rasmussen  (215) 541-2388