HARRISBURG – A bill sponsored by Sen. Kristin Phillips-Hill (R-York) to overhaul Pennsylvania’s budgeting process was approved today by the Senate Finance Committee.
Senate Bill 474 would implement zero-based budgeting (ZBB), a process that requires state agencies to justify every dollar they spend rather than using the previous year’s funding as a baseline.
“This bill will ensure that agencies are not starting each year with the amount received prior. Every dollar – starting with the first – must be fully accounted for because ultimately, it belongs to the taxpayers,” Phillips-Hill said.
Under the proposal, 20% of state programs would undergo a full ZBB review each year, completing the cycle in five years. Agencies would be required to provide detailed breakdowns of program costs, legal justifications, and measurable outcomes.
“This is shaping up to be a difficult budget year and if we don’t change course now, we’re only digging ourselves into deeper deficits,” Phillips-Hill added. “We need to get serious about how we spend public dollars.”
Phillips-Hill points to Texas’ success in closing a structural deficit due to applying ZBB to the state’s budget in 2003. The state faced a $10 billion deficit prior to implementing ZBB. For the first time since World War II, the state’s general fund spending was reduced, and no tax increases were required to balance the budget.
The bill now heads to the full Senate for consideration.