More Please: Prioritization of Spending Programs

Fiscal Policy — By on November 8, 2010 at 6:30 AM

The governor called a press conference after the election to outline his transition process, and to call for input from citizens over the next four years, stating,

We want the strongest ideas to emerge – ideas that will take our state forward, create opportunities and strengthen the economy.

One thing that citizens can tell the Governor is to continue something he is already doing. The practice started only a couple years ago, and is illustrated by the box shown below. Parnell is requiring departments to prioritize their programs.

It may not seem like a big deal, but forcing large bureaucracies to prioritize their programs is difficult and it makes them uneasy. No bureaucracy wants their programs cut, and they know that if their programs are listed by priority, the Legislature may cut some of the programs from the bottom of the list when cash is either needed and/or not available. It’s an excellent budgeting practice, and it should be required by law. Well, actually it is, but it isn’t always  practiced.

The reason is it isn’t always practiced is because some administrations interpret the statutes differently than others. The box above is taken from the FY2011 budget proposal for the Department of Commerce, Community, and Economic Development. You may notice that there is a citation above the box from Alaska law. This means that the Parnell administration has interpreted this section of law as requiring them to compile the information in the box.

This particular section of law has a stuffy title called, “The Executive Budget Act.” The citation 37.07.050(a)(13) reads

(a) The agencies shall assure the development of a statewide system of results-based government designed to increase efficiency and effectiveness of state programs and services. Toward that end, each state agency shall, on a semi-annual basis, identify results-based measures that have been used to work toward achievement of the mission statement and desired results issued by the legislature and of other goals of the agency, and set out the results as measured. Each state agency shall also prepare information that shall be compiled and submitted on December 15 each year to the office, the legislature, and the legislative finance division; this information must…
(13) prioritize the activities of the agency from the most important to the least important.

Most people don’t understand how governments chafe under these kinds of rules. In the past, rather than abide by this law, it was easier for administrations to interpret it in some other way. In other words, the true intent of the law was not honored.

Each budget year, the departments have to pull together this information before they make their budget proposals. Not every department does it like it should be done. Some departments, like Education and Early Development, spend more than 97% of their budget on one priority. This is not prioritization. Rather the department is trying to protect its programs from being cut by making most, if not all of their department, engaged in their top priority.

Despite those bad examples, there are enough good examples from other departments that Parnell appears to be continuing the practice. Policymakers should take notice and work to hold departments’ feet to the fire to make the practice better, and make sure that when the administration changes, the practice continues.

Jeremy Thompson is the Executive Director of Alaska Policy Forum.

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