To Understand True Impact Of Government, We Need New Types Of Public Accounting
Posted: Mon Jun 08, 2015 7:25 pm
Does NPV+ explain why O'Malley raised taxes 40 times? Oh boy.
[quote=http://www.fastcoexist.com/3044714/to-u ... accounting]But that could change. Nelder is leading an effort to include sustainability in public budgeting, and he's received support from a high profile figure: Martin O'Malley, a potential Democratic presidential candidate. As governor of Maryland, O'Malley hired GFN to run a series of analyses of public budget decisions because he recognized that social and environmental concerns were often being left to one side.
The accounting method developed by Nelder is called Net Present Value Plus (NPV+) and it's basically an extension of how most governments currently do cost-benefit analyses. Net Present Value is a way of assessing the future value of something in current dollars, so you can properly compare today's outlay with the expected future return. The new "plus" bit is an allowance for environmental and social factors.
"We are experiencing a shift in which we measure government not by its input, but by the benefit each service provides to communities. New tools like NPV+ enabled this transition and help make the economic case for sustainable choices in our budget decisions," O'Malley writes in an email. "In Maryland, NPV+ helped guide critical investments we needed to make—from restoring the health of the Chesapeake Bay, improving mass transit, to reducing our government’s carbon footprint. Government should be utilizing tools like NPV+ so that we can make better, more sustainable choices."[/quote]
[quote=http://www.fastcoexist.com/3044714/to-u ... accounting]But that could change. Nelder is leading an effort to include sustainability in public budgeting, and he's received support from a high profile figure: Martin O'Malley, a potential Democratic presidential candidate. As governor of Maryland, O'Malley hired GFN to run a series of analyses of public budget decisions because he recognized that social and environmental concerns were often being left to one side.
The accounting method developed by Nelder is called Net Present Value Plus (NPV+) and it's basically an extension of how most governments currently do cost-benefit analyses. Net Present Value is a way of assessing the future value of something in current dollars, so you can properly compare today's outlay with the expected future return. The new "plus" bit is an allowance for environmental and social factors.
"We are experiencing a shift in which we measure government not by its input, but by the benefit each service provides to communities. New tools like NPV+ enabled this transition and help make the economic case for sustainable choices in our budget decisions," O'Malley writes in an email. "In Maryland, NPV+ helped guide critical investments we needed to make—from restoring the health of the Chesapeake Bay, improving mass transit, to reducing our government’s carbon footprint. Government should be utilizing tools like NPV+ so that we can make better, more sustainable choices."[/quote]
