Case 2: Frustrating Experiment of PPBS in New York
5.1.8 Start of Planning in New York State
To meet the needs of massive expansion, Governor Rockefeller in 1961 established the Office for Regional Development (ORD) as the state planning agency. The need was recognized for ‘‘a carefully conceived planning process . . . to deal with the needs in a more effective fashion’’
(Budget Guidelines, 1967, 5). The New York State Joint Legislative Com- mittee on State-Local Fiscal Relations made clear that the reasons for planning are:
‘‘Annual legislative battles over local budgets and taxes prevent local governments from engaging in long-range planning to solve their mounting problems. Such battles also prevent the Legislative and Executive branches of the state government from engaging in such planning.’’ (1966, 46)
The ORD consisted of a small staff but was assigned four ‘‘global,’’
principal functions: (a) to help coordinate the planning and development activities of all state departments; (b) to help coordinate state planning and development activities with those of the local and federal governments; (c) to encourage comprehensive planning on a regional basis; and (d) to facilitate,
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by state action, local planning and development activity (NY ORD, 1964, 152). The 1964 report by this office was an ambitious document describing a 60-year (1960–2020) land use and development outlook for the whole State. They designed 15 basic steps for action on the future role of plann- ing. Among its recommendations, two are worth more attention. One is preparing long-termcomprehensive regional plans:
‘‘These plans would be prepared by the State with the cooperation of local governments and with the help and advice of the Regional Councils. They would provide significant information for the preparation of the State capital construction budget, and would be reviewed and updated periodically by the State and Regional Councils.’’ (ORD, 1964, 143, No. 3)
The other is annual update of the plans:
‘‘Annual preparation of and submission by the Budget Director to the Governor, as a part of the proposed Executive Budget, of a specific physical program and a financial program.’’ (ORD, 1964, 143, No. 6)
Given the scale of program expansion and manual style of budget work at that time, the required planning and annual updates meant a daunting amount of work to agencies, as can be seen from Figure 5.4 ‘‘the required program plan reports.’’
Since 1964 New York had been ‘‘attempting to cope more effectively with the increasing complexities of government through the development of a ‘planning-programming-budgeting system (PPBS) that systematically relates the expenditure of funds to the accomplishment of planned goals,’ ’’
(New York OPC and DoB, 1967, 5). This new tool was devised for three main reasons. First, it takes the government operating structure as an ‘‘inte- grated system directed toward the fulfillment of a great variety of goals’’
(ibid.). Second, it can provide policy makers with ‘‘a more objective basis for making policy decisions’’ by furnishing ‘‘information and analyses on both immediate and future consequences of program and budget decisions’’
(ibid 5–6). Finally, it was designed
‘‘with full recognition of the continuing need for expenditure controls, management control, and management improvement to assure that specific activities are carried out effectively and efficiently, . . . for a carefully conceived balance among all administrative functions.’’ (ibid 6)
Since start of modern executive budget in the 1920s, PPBS ‘‘was the first budget system designedto accommodate the multiple functions of budget- ing’’ (Schick, 1966, 244). Table 5.1 provides timeline of major events on planning and budgeting in New York State.
When the Division of Budget maintained its usual focus on control, which was out of tune with the governor’s expansionist vision and development priority, the Governor turned to the Office of the Secretary to the Governor.
That office, with a 100-person staff (most were ‘‘program associates’’
assigned to specific functions) became the center for policy making and program formulation (Schick, 1971, 118–9). This office was more powerful in expansion years than in years when the governor was more fiscally conservative. And its relation with the Budget Division thus varied (Schick, 1971, 119, note 3). Planning and budgeting staff often held quite different perspectives on the same issues. The planners often were skeptical of the Figure 5.4 Program plan reports, New York State.
Source: Guidelines for Integrated Planning, Programming, Budgeting 1967, (page 18) by the State of New York Office of Planning Coordination and the Division of the Budget.
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Table 5.1 Timeline of Major Events on Planning and Budgeting in New York State
Year Event
1958 Legislative staff report: responsibilities of DoB not compatible with planning
59–60 DoB lost ground on planning
1961 DoB strengthened long-range planning capability as an adjunct to its Research Unit
1961 October, Hurd appointed Marshall Deputy Budget Director to oversee Budget’s role in capital construction
1961 Office for Regional Development established
Planning Coordination Board created, an interagency body chaired by Commissioner of Commerce
1964 Within the Division of the Budget
Budget examination units reorganized ‘‘along program lines to allow greater staff attention to long-range impact of programs. . .’’
A new Budget Planning & Development Unit attached to Director’s Office
1964 Governor appointed Hurd chairman of Interdepartmental Management Improvement Council
1964 Planning-Programming-Budgeting System initiated
1965 May 6 meeting of IMIC, Marshall acknowledged problems of interagency coordination, overlapping responsibilities of DoB and ORD, and need to define purpose and scope of long-range planning effort more precisely;
May 11, Governor announced DoB to concentrate on fiscal and financial planning; ORD to undertake massive statewide comprehensive planning
Governor instructed DoB and ORD to coordinate any future demands on agencies for planning data
1965 August, President Johnson adopted PPBS in the federal government 1966 ORP changed to Office of Planning Coordination (OPC);
PPB is termed as ‘‘Integrated PPB’’ inGuidelines
1966 Dec., Hurd asked for Governor approval to conduct management study of DoB by consulting firm McKinsey and Co. Report came out in May 1967
1967 PPBS gained national reputation; in NY it was divorced from planning 1967 Oct. Lanigan memo to Marshall protesting McKinsey recommendations 1969 May, IMIC session: ‘‘defining and measuring effectiveness continue to
be major stumbling blocks in PPBS’’
1969 PPBS stopped
1970 Program Analysis and Review (PAR) replaced PPBS 1971 June, PPBS stopped at federal level
negative attitude of budgeters toward new programs; while the budget examiners as often questioned the spending attitude of planners (ibid).
With the publication in 1964 of the 60-year plan for urban land use and infrastructure construction by ORD (1964), the Division of Budget felt a threat to its leadership role in capital programming and financial manage- ment. DoB claimed it wrong to split resource planning from the annual budget, while the ORD rebutted that this type of planning was not covered in the budget process. Governor Rockefeller resolved this jurisdictional fight by granting ORD and Budget joint responsibility. Thus was born the hybrid of ‘‘planning-programming-budgeting’’ (Schick, 1971, 119). The New York PPBS required three conditions: (a) each agency should have permanent, specialized staffs to conduct continuing, in-depth analyses of agency objectives and the various needs to meet these objectives; (b) there should be a multi-year planning and programming process to incorporate an information system and to present data in a way so as to facilitate decision-making by the leaders; and (c) the budgeting system and process can translate broad program decisions into the annual budgetary context (Novick, 1965). These are true at the federal and also state levels (NY Joint Committee, 1966). None of the components of PPBS was new at that time, but integrating them into one system for effective policy making was a demanding task; any success would rely heavily on the cooperative and coordinated efforts, based on the willingness of elected officials, planners, budgeters, and program managers.