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Forget about starting from $0; Kenney shifts to different budgeting method

When Mayor Kenney was campaigning for the city’s chief executive job, he often spoke about his plan to do zero-based budgeting and the savings that could come from it. Now that he is in office, however, zero-based budgeting has been replaced with “program-based budgeting,” a similar but different method for planning how to spend taxpayers’ money.

When Mayor Kenney was campaigning for the city's chief executive job, he often spoke about his plan to do zero-based budgeting and the savings that could come from it.

He even put a dollar figure to how much he believed could be saved by implementing the budget tool that requires all departments to start from $0 and build up their budget from scratch.

"…Through Zero Based Budgeting, Philadelphia will have $80 million to reinvest in schools or universal pre-k," Kenney wrote in his policy paper. He also tweeted: "Pension money will come from zero based budgeting like Montgomery County."

Now that he is in office, however, zero-based budgeting has been replaced with "program-based budgeting," a similar but different method for planning how to spend taxpayers' money.

"The administration intends to fulfill Mayor Kenney's vision of a 'zero-based budget' by fiscal year 2018 through the implementation of a program-based budgeting system, one that places a heavy emphasis on performance and alignment to the mayor's goals," Kenney spokesman Mike Dunn said.

While program-based budgeting can result in savings, it is not the same as zero-based budgeting.

We asked an expert on zero-based budgeting to describe the differences between the three budgeting methods that have been mentioned by the Kenney administration and the Pennsylvania Intergovernmental Cooperation Authority, which released a report yesterday advocating for performance-based budgeting.

Uri Monson, the Montgomery County chief financial officer who implemented zero-based budgeting and saved tens of millions in the county's budget, explained it this way:

The budget programs are simply tools and the methods can be combined, Monson said.

"You can do a program based budget where you start at zero, blending the two tools," Monson said. "Fundamentally they are different tools for developing and measuring a budget.  They each have their strengths and weaknesses, and fundamentally are dependent on leadership and support to be effective."

Dunn said the upcoming budget, Kenney's first as mayor, will include performance-based budgeting for new initiatives. The administration hopes to have much of next year's budget (fiscal year 2018) constructed through performance-based budgeting.

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