The leader of a key legislative committee overseeing the state budget is calling for major reforms in the way the Legislature spends money.

Lawmakers should have more oversight in crafting performance measures the executive branch use to show how effectively it’s using taxpayer money, said House Finance Committee chair Sylvia Luke.

State agencies currently set the measures and report how well they’re meeting them, typically with no independent review.

Luke also wants to implement “zero-based budgeting” in which agencies would start each two-year budget cycle from scratch and justify every dollar they’re requesting.

“We cannot continue to provide these services just because we’ve been doing it,” Luke said. “We need measurables.”

Joint Finance WAM budget Chair Sylvia Luke during light moment with Chair Donovan Delacruz.

House Finance Committee Chair Sylvia Luke plans to push for major changes in the state budgeting process.

Cory Lum/Civil Beat

It would probably be 2020 before lawmakers could begin pushing through the sweeping changes, said Luke. But she hopes to begin laying the groundwork during the 2019 session that starts Jan. 16.

Luke’s call for greater accountability comes as Gov. David Ige presented his proposed budget for 2019 through 2021. And it presages a battle between lawmakers and the executive branch heading into the session.

Luke’s Senate counterpart, Ways and Means Committee Chairman Donovan Dela Cruz, did not return calls for comment. However, Luke said she had spoken to Dela Cruz and that he generally supports the ideas.

Ige was also unavailable for comment Monday, a spokeswoman said.

Governor David Ige walks into press conference past computer screen at the Capitol.

Gov. David Ige arrives at a press conference Monday to unveil his two-year budget plan. Luke wants to reform the system so that legislators have more spending oversight.

Cory Lum/Civil Beat

Luke has repeatedly pushed to get a better handle on government spending that bypasses the Legislature.

For example, in 2013 she helped push through legislation to stop the proliferation of special and revolving funds, which allow money to be steered straight to executive agencies without approval by the Legislature. State special funds, along with federal money, make up about half of the roughly $14 billion the state spends every year.

Luke also has been working to monitor tax credits and exemptions, which are in essence another form of expenditures that bypass the legislative budget process.

But attaching funding to meaningful performance measures may be the most ambitious change Luke has proposed. In theory, executive agencies already track how well they’re achieving performance goals in documents known as variance reports.

Critics say the system is full of holes.

Rachel Hibbard, a former Hawaii state budget analyst and government auditor, noted that the agencies set their own performance measures, the results of which they report themselves without third-party verification.

“Her idea certainly has merit in improving accountability,” said Hibbard, who now works for the California state auditor.

Marion Higa, a former longtime Hawaii state auditor, echoed the criticism of the current system.

“So many of the documents are just paper exercises,” Higa said of the variance reports.

Luke said she would like the Legislature to be more involved in setting the measures and verifying that the departments are meeting their goals as a condition of giving the agencies more money.

She pointed to early education. Ige on Monday proposed $200,000 in additional funding to staff the state’s pre-kindergarten program, and some $14.3 million for capital improvements to pre-kindergarten classrooms.

The governor said that research shows such programs produce better outcomes for students and save the state money in the long run. But he acknowledged the administration doesn’t have data on students now in the program.

The administration’s current measures of effectiveness focus more on how many students are participating and the number of qualified teachers than how well the program is educating children.

Luke noted the first group of students to go through the program will be in third grade this year and will take standardized tests. How well they perform, she said, will be a meaningful measure the state should look at when deciding whether to expand the program.

“I’m so rooting for those kids,” she said. “I just want the (Department of Education) to identify those kids.”

But challenging individual budget requests may be easier than making a sweeping reform to the process.

Higa, who was state auditor for more than 20 years, said the Legislature now has little “capacity to challenge what the executive puts forth as a measure of itself.”

To build that capacity would require funding and experienced people, Higa said. And it would have to be rolled out in phases.

“It’s too much to gobble up all at once,” she said.

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