2019 State Standard of Excellence
11. Cost-Benefit Analysis
Did the state or any of its agencies assess and make publicly available the costs and benefits of public programs?
Why is this important?
Cost-benefit analysis helps state governments quantify outcomes and program costs to ensure that public dollars are being efficiently spent to get the most value for taxpayers and the best outcomes for residents.
A 2013 Washington State law (pp. 105–106) directed the Department of Corrections, in consultation with the Washington State Institute for Public Policy (WSIPP), to (1) compile an inventory of existing programs; (2) determine whether its programs were evidence-based; (3) assess the effectiveness of its programs, including conducting a cost-benefit analysis; and (4) phase out ineffective programs and implement evidence-based programs. As a result of this and similar laws, WSIPP has published hundreds of cost-benefit analyses in a wide variety of issue areas over the past 10 years. The WSIPP cost-benefit framework has been widely adopted by governments across the country.
The Colorado Governor’s Office of State Planning and Budgeting proactively publishes periodic Results First reports. The 2018 health findings report built on earlier cost-benefit analyses in the areas of child welfare, criminal justice, and juvenile justice. As part of these efforts, Colorado has published technical documentation on the components of its cost-benefit analysis model.
A 2015 Connecticut law (pp. 649–651) requires the Institute for Municipal and Regional Policy at Central Connecticut State University to perform cost-benefit analyses of programs operated by the Connecticut Departments of Correction, Children and Families, and Mental Health and Addiction Services as well as the Court Support Services Division of the Judicial Branch. The initiative issues regular reports, including the 2018 Benefit-Cost Analyses of Evidence-Based Programs report, which “found the Judicial Branch’s Court Support Services Division spent 92% of their adult funding and 99% of juvenile funding on evidence-based programs and Department of Corrections spent 97% on such programs.”
A 2015 Minnesota law (section 13) directs Minnesota Management and Budget to develop a cost-benefit inventory of evidence-based interventions. As a result, the state developed cost-benefit analyses in the areas of criminal justice, adult mental health, children’s mental health, child welfare, probation, and substance use, based on the following four levels of evidence: proven effective, promising, theory based, or no effect. Minnesota Management and Budget maintains the Minnesota Inventory, which includes a searchable clearinghouse of more than 400 programs.
A 2014 Mississippi state law requires the Mississippi Departments of Corrections, Health, Education, and Transportation to (1) develop an inventory of their programs based on four levels of evidence (evidence-based program, research-based program, promising practice, or other programs and activities) and (2) report during the budget process about their programs’ cost-benefit ratios and effectiveness. The Mississippi Joint Legislative Committee on Performance Evaluation and Expenditure Review publishes cost-benefit analyses and reports on program effectiveness.
New Mexico has published a series of inventory and cost-benefit reports in the areas of children’s behavioral health, adult behavioral health, early education, child welfare, criminal justice, healthcare, infant and maternal health, and education. The Legislative Finance Committee’s Evaluation Unit publishes Results First reports, program evaluations, information technology reviews, and health policy reviews publicly. The state has also conducted cost-benefit analyses of its programs and published guidance on Legislating for Results.
Starting in 2013, the New York State Division of Criminal Justice Services developed a cost-benefit analysis, based on an initial technical report, to outline the impact, costs, and benefits of specific criminal justice interventions. As a result of these efforts, New York has continued to operate the Alternatives to Incarceration program (a $7 million program in 2018-2019) to fund evidence-based interventions.
Under a 2003 Oregon law, the Oregon Department of Corrections, the Oregon Youth Authority, the Oregon Youth Development Division, and “the part of the Oregon Health Authority that deals with mental health and addiction issues” are required to compile a biennial program inventory with results from funded programs and to perform cost-benefit analyses. In 2018 the Youth Authority and the Department of Corrections both published reports on costs and benefits of their programs. The Youth Authority’s report found that four of the six programs examined had a high likelihood of providing a positive return on investment.
Since 2013, Utah state agencies have used the SUCCESS Framework to perform cost-benefit analyses of government services by integrating three performance elements: quality, throughput, and cost. The cost-benefit tool is described in Utah’s Measurement Guide. The SUCCESS Framework “help[s] agencies improve quality, reduce costs, and create the capacity to do more with the same or fewer resources (improved throughput).”