1 Fiscal Notes: State Agency Perspectives John Erickson Fiscal Note Coordinator Washington State Department of Ecology

2 Survival Guide for Fiscal Notes A State Agency Perspective Maintain perspective… Deal with shock and denial… Inventory your resources… Assess your limitations… Keep your wits… Here are some fiscal note survivors’ lessons from experience to help you stay balanced and focused. The basic survival guide rules apply here:

3 …Keep your wits ! What some fiscal note experts had to say:* Steve Jones, Senate Dave Johnson, House Garry Austin, OFM Robin Campbell, OFM John Erickson, Ecology (Moderator) *Key remarks from a panel moderated by John Erickson, as part of a previous statewide fiscal note training session.

4 What The Experts Said: Steve Jones, Senate: “Fiscal Notes are the second most-read documents by legislative members and staff. Bill summaries are number one. The bills themselves are far down the list.”

5 What The Experts Said: Dave Johnson, House: ”Coordination is crucial. When you see another agency using very different assumptions, find a way to use shared assumptions. Don’t wait for OFM, but call in your analyst if you need help.”

6 What The Experts Said: Garry Austin, OFM: “Each fiscal note represents the executive branch of government to the legislature. Each fiscal note should be a very professional analysis, and should be free of math errors and grammatical errors.”

7 What The Experts Said: Robin Campbell,* OFM: “Each fiscal note should read well. The level of awareness and quality of thinking that go into a fiscal note come out in the writing.” *Robin is now at the Governor’s Office, on the GMAP Team.

8 What The Experts Said: John Erickson, Ecology: “Credibility is everything.”

9 The Big Picture: Who Reads Fiscal Notes? OFM staff Journalists Lobbyists Legislators Legislative staff Agency staff The General Public

10 What’s so hard about explaining costs? Fiscal Notes require you to: identify workload drivers; This may be the first time anyone has thought through in detail what work would actually be required to implement the proposed change in law. clarify scope and purpose assumptions. describe an implementation scenario;

11 What do people say about fiscal notes? “Fiscal notes are the documents everyone loves to hate” One legislator might prefer to blame a bill’s shortcomings on something else -- the fiscal note -- rather than to argue with a valuable colleague. Why is that? Hard to say…. – Steve Jones, Senate Attorney

12 Where did fiscal notes come from? Wisconsin. There are lots of ways to ask and answer financial questions. Formal fiscal notes help everyone involved know what is being asked and what to expect from the answer.

13 Our Reputation: Today, most states use fiscal notes. Washington’s are among the best! Governing Magazine once gave us an “A” in financial management. They were impressed that we consider the six-year financial impact of legislation before adopting it. * * (This was a few years ago.)

14 Basic Principles: 1. Credibility is everything! 2. Coordination on assumptions is fundamental for credibility. 3. Fiscal impact is measured from the current level 4. Deadlines are brutal. Start early! 5. Honor all fiscal note requests, but know where to prioritize!

15 Basic Principle: 1. Credibility is everything! An accurate fiscal note is one estimated from explicit assumptions. A credible fiscal note is one based on credible (& shared) assumptions.

16 Basic Principle: 1. Credibility is everything! Never argue the bill’s merits in the fiscal note. Never even appear to. Never increase or minimize costs in accord with the agency’s position on a bill. Never appear to.

17 Basic Principle: 1. Credibility is everything! Use “Indeterminate” rarely. Try to learn the sponsor’s intent. If you can’t do that, you can show two different scenarios that are each a reasonable interpretation of the bill as written.

18 Basic Principle: 1. Credibility is everything! Write clearly! “Each fiscal note should read well….” -- Robin Campbell Use a straight news style. “Clear writing forces clear thinking.” – John Erickson

19 2. Coordination on assumptions is fundamental for credibility OFM and legislative staff cite uncoordinated fiscal notes as one of their top frustrations!! Communicate and coordinate early!! (or backtrack -- if you can) This is the lead agency’s job, but if they do not contact you right away, get on it!

20 2. Coordinate assumptions for credibility (continued): Keep coordinating on changing bill versions. Reinforce other agencies’ fiscal notes. Exchange draft fiscal notes to help coordinate.

21 2. Coordinate assumptions for credibility (continued): Clear writing is crucial to communicate coordinated assumptions. Re-write any assumptions that even appear to conflict! Some verbs say what will happen under current law; others say what would happen differently if the bill were to become law.

22 3. Fiscal impact is measured from the current level a. By definition, the FN measures the difference between today’s budget, before policy changes, and the budget required when the bill would become law. New work may not fit today’s program boundaries. The Governor’s budget is usually not the base-line. When in doubt, consult OFM budget staff. Caution!

23 3. Fiscal impact is measured from the current level b. It may not be obvious how current level relates to some bills. Consider: Would the bill add to an existing program? Would the bill replace any of an existing program? What if the bill would replace some fees with others?

24 More on current level: When the bill overlaps today’s programs: Currently, do you have authority to do what the bill proposes? Who decided current priorities? When the bill’s new work doesn’t fit in any of today’s programs: Who decides who gets assigned the fiscal note?

25 4. Deadlines are brutal. Start early! Before the session, be sure affected staff can “flex” their routines. Track bill analyses. At least discuss timing and workload drivers on probable bills. Start early!!!! Know and use your agency’s internal procedures to manage short deadlines:

26 4. Deadlines are brutal. Start early! We use standard costs to save time for coordination. Avoid impossible expectations; communicate early per your agency’s process; get help fast if you need it! We expect help from legislative staff on assumptions. Use our agency’s protocols to get it!

27 5. Honor all fiscal note requests, but know where to prioritize! Put in your best work early on the bills most important to your agency Prepare in advance your FNs for agency request legislation and Governor’s request legislation. Always coordinate right away on multi-agency bills.

28 5. Honor all fiscal note requests, but know where to prioritize! Honor legislative budget staff requests for budget estimates, but do it carefully! Work out your internal procedures in advance, keep key people informed, quickly follow through with your fiscal note, and alert legislative budget staff to changes from the premature estimate.

29 During the session, have your legislative liaison staff keep you informed: which new bills have serious support, which just “test the waters” or are “hero bills.” More about understanding where to prioritize: When “push” comes to “shove” -- (it often seems to) – you’ll make better decisions about which to concentrate on first.

30 Anticipate workload crunches approaching committee cut-offs More about understanding where to prioritize: We aim for one-day turnarounds at cut-off time. Our system allows us to work that fast on the next version if: we are familiar with the bill; we know the legislative intent; we know how we are coordinating with other agencies; we know that our assumptions are credible; we have a clearly written Fiscal Note on a similar version of the bill.

31 Anticipating workload crunches approaching committee cut-offs… More about understanding where to prioritize: Conversely, we take more time the first time we see a bill to verify credible assumptions, coordinate with other agencies, and to edit our fiscal note text for clear thinking and communication. The real deadline is usually the hearing. Sometimes that is after the 3-day deadline, sometimes before. We can call staff to find out, and we keep people informed.

32 Basic Principles Review: 1. Credibility is everything! 2. Coordination on assumptions is fundamental for credibility. 3. Fiscal impact is measured from the current level 4. Deadlines are brutal. Start early! 5. Honor all fiscal note requests, but know where to prioritize!

33 “Credibility is everything.” For questions, comments, or additional information, you may contact John Erickson at: or (360) John Erickson Fiscal Note Coordinator Washington State Department of Ecology