HB 1105 — An Act providing for zero-based budgeting.

PRINTER'S NO.    1226

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                       HOUSE BILL
                       No. 1105
                                              Session of
                                                2025

     INTRODUCED BY GROVE, HAMM, GREINER, STAMBAUGH, KAUFFMAN, GILLEN,
        ROWE, WARNER AND KUTZ, APRIL 3, 2025

     REFERRED TO COMMITTEE ON APPROPRIATIONS, APRIL 3, 2025


                                   AN ACT
 1   Providing for zero-based budgeting.
 2      The General Assembly of the Commonwealth of Pennsylvania
 3   hereby enacts as follows:
 4   Section 1.   Short title.
 5      This act shall be known and may be cited as the Zero-Based
 6   Budgeting Act.
 7   Section 2.   Findings.
 8      The General Assembly finds and declares as follows:
 9          (1)   The traditional method of budget development, which
10      relies upon incremental adjustments to expenditures made in
11      the previous financial period, insulates governmental
12      activities from the thorough fiscal review expected by
13      taxpaying citizens.
14          (2)   New and changing demands for public services are met
15      through excessive budget growth rather than by pruning
16      obsolete programs and redirecting existing funds. Some
17      programs were established so long ago that the original
 1      statutory basis has either been forgotten or is out of date.
 2      In time, the budget is driven by inertia rather than by clear
 3      and defensible purposes.
 4            (3)   Zero-based budgeting is an effective method to
 5      counter the tendency toward perpetuation of outdated State
 6      programs.
 7   Section 3.     Budget review.
 8      (a)   Review.--The Secretary of the Budget shall subject every
 9   program in State government to zero-based budget review no less
10   often than once every five years. In order to implement this
11   schedule, approximately one-fifth of the budget shall be subject
12   to zero-based budgeting in each year beginning in 2026. In 2026,
13   the Governor shall submit a zero-based budget for agencies with
14   a cumulative total of expenditures of at least 20% of the
15   General Fund budget.
16      (b)   Agency plan.--To accommodate zero-based budget review,
17   the Secretary of the Budget shall require agencies to prepare
18   and submit a zero-based budget plan in addition to any other
19   information that may be required by statute, rule or directive.
20   At a minimum, the plan shall contain the following information:
21            (1)   A description of those discrete activities that
22      comprise the agency and a justification for the existence of
23      each activity by reference to statute or other legal
24      authority.
25            (2)   For each activity, a quantitative estimate of any
26      adverse impacts that could reasonably be expected should the
27      activity be discontinued, together with a full description of
28      the methods by which the adverse impact is estimated.
29            (3)   For each activity, an itemized account of
30      expenditures that would be required to maintain the activity

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 1      at the minimum level of service required by the statutory
 2      authority, together with a concise statement of the quantity
 3      and quality of services required at that minimum level.
 4          (4)   For each activity, an itemized account of
 5      expenditures required to maintain the activity at current
 6      levels of service, together with a concise statement of the
 7      quantity and quality of services being provided.
 8          (5)   A ranking of all activities that shows the relative
 9      contribution of each activity to the overall goals and
10      purposes of the agency at current service levels.
11   Section 4.   Effective date.
12      This act shall take effect in 60 days.




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