Should Alaska go to zero-based budgeting?

Republican-led House Majority seeks tough new reviews of agencies

Posted: Wednesday, February 16, 2011

Some top Alaska legislators say they’re going to take a tough new look at the state’s budget, including forcing each department to defend its very existence with a move to “zero-based” budgeting.

While House Speaker Mike Chenault, R-Nikiski, said the new budgeting system was part of an new fiscal responsibility effort and talked of the state’s need to live with its means, he said he didn’t know whether the departmental reviews would lead to more or less money for each department.

Reviewing what they’re doing might result in shifting state spending elsewhere, he said.

“If it’s not working, should we use that money on things that may benefit Alaskans better,” he said.

In an example he later acknowledged was “lame,” Chenault likened the budget review to a housewife deciding to give up some satellite channels because they just weren’t watching movies anymore.

Building budgets from the ground floor would guarantee the state was spending its money wisely and improve accountability, he said, but wouldn’t necessarily mean painful cuts.

The budgeting change is about more than reducing spending, said Rep. Alan Austerman, R-Kodiak, leader of the 26-member, Republican-led House Majority Caucus.

“We’re not here just to cut the budget,” he said.

The caucus rolled out the zero-based budgeting and departmental review proposal at a press conference Monday.

Others who may have to deal with the House budget writers said they knew little about the specifics of what Chenault’s group was proposing beyond that announcement.

“I really need more information about what they are proposing before I can offer any insight into how it would work in Alaska,” said Karen Rehfeld, director of Gov. Sean Parnell’s Office of Management and Budget.

She said she hasn’t had any experience dealing with zero-based budgeting.

One of the Senate’s budget experts, Sen. Lyman Hoffman, D-Bethel, co-chairman of the Senate’s Finance Committee, said they hadn’t been told what the House was doing.

“We’ll see how that process works and what product comes out of the House and we’ll take it from there,” he said.

Hoffman said the Senate would be using its regular process.

“The system we’ve been using in the past is the same one we anticipate using this year,” he said.

The House Majority said zero-based budgeting could also be done by ‘sunsetting’ departments. A sunset clause means funding would end after a predetermined time span if a department could not justify its continued existence. Only one-fifth would be done each year, he said.

Democratic House Finance Committee member Rep. Mike Doogan, D-Anchorage, said zero-based budgeting was something of a fad in the 1980s.

“The luster of it has faded,” he said.

The Republican leadership has presented little information about how they’ll be using the concept, Doogan said. It is likely to be quite labor intensive, he said. It is good that they’re only planning to do 20 percent of departments a year, Doogan said, but there are wide variations in departments.

The Department of Military & Veterans Affairs has a budget of $11 million, while the Department of Health and Human Services has a budget in the billions of dollars.

“That’s going to translate into a lot more people,” he said.

Much of what the House Majority members described about what they wanted the state’s budget to do is quite similar to Parnell’s announced goals.

Chenault said he didn’t know what the differences might be between Parnell’s budget and what the House Majority would be doing.

“He’s put out his budget and its our job to go through the budget,” he said.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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