How does the zero-based budgeting process determine funding priorities?

The zero-based budgeting process determines funding priorities by matching priorities to available revenues. In this approach, every budget cycle begins from a "zero base," meaning that all expenses must be justified for each new period, rather than basing new budgets on historical spending levels. This method encourages program managers to evaluate their operations and prioritize their initiatives based on actual needs and available financial resources, rather than simply rolling over previous budgets. It compels decision-makers to critically evaluate each program's contribution to organizational goals and to allocate funds accordingly to those that offer the best value or most significant impact in line with current revenue capabilities. This systematic assessment ensures that resources are directed towards the most critical needs, promoting efficiency and effectiveness in the allocation of limited public funds.