Results-based budgeting holds that an organization as large and complex as state government can work most effectively for the people by first establishing a mission for each department and division, and then holding government agencies accountable for achieving measurable results. Implementing results-based budgeting has not been easy. In Alaska it has required a significant rethinking of how the executive and legislative branches share responsibility for budgeting.

In the past, the Alaska legislature's budget writers faced the formidable task of conducting departmental reviews at the start of each year's budget cycle. These began a time-consuming and repetitive process in which the Finance Committee and its budget subcommittees evaluated how much each program cost and whether money was available to fund it.

Under this system, programs generally continued to receive funding from year to year out of plain inertia. With few objective ways to determine the effectiveness of annual appropriations, budget-writers had to take the agencies' word that they needed the same funding, or more, to continue operating successfully.

This situation became entrenched during the happy coincidence that saw the trans-Alaska Pipeline begin delivering North Slope oil to market at the same time that world oil prices reached historic peaks, bringing billions of dollars into our state's treasury. With money available for almost every imaginable need, no one complained about not having enough, or about the absence of demonstrable results.

Far-sighted Alaskans have long known that this institutionalized absence of accountability for results in state programs and the resulting growth of state spending could only end with the eventual depletion of Alaska's oil wealth. In the 1990s, despite wide fluctuation in oil prices, a continuing decline in oil production and resulting state revenue has sharpened the need for Alaskans to allocate state dollars in a more accountable way.

Alaska's recent effort to implement results-based budgeting began as far back as 1993. That year, Senator Sean Parnell (R-Anchorage) attended a conference on the topic with the governor's budget chief, and returned as a convert to the cause. Parnell sponsored legislation in 1994 to bring missions and measures into the state budget process.

Although the bill implementing these recommendations passed the Legislature, the governor vetoed it. At that point in time, results-based budgeting was a turf war between the Executive Branch and Legislative Branch. The governor's cabinet did not want legislators telling them what their mission was nor how their agency's performance was to be measured. Parnell sponsored a similar bill the following year, which again passed the legislature by a wide margin and was vetoed by the next sitting governor.

Subsequently, legislative leaders invited Craig Holt, a nationally recognized expert on results-based budgeting, and Cheryl Frasca, an experienced Alaskan, to work with the House and Senate Finance committees to develop missions and measures for state government. Following that training, then Senate Finance Co-Chair Drue Pearce took the bold step of assigning Finance subcommittees to draft specific missions and measures for state departments. The legislative budget subcommittees completed drafting several missions and measures for each department in this 1998 effort.

The Finance Committees' 1998 work in writing missions and measures for some state agencies was incorporated into the operating budget bill as intent language. The legislative leadership realized it was important to tie the results the legislature was trying to achieve on behalf of the people to the actual appropriations. The fear was that if missions and measures were passed in a bill separate from the actual budget bill, the missions and measures would simply become another document left on the shelf of time rather than becoming an integral part of the budget.

While the governor and his commissioners worked more closely with the legislature this time, and publicly endorsed the goal, the governor vetoed the intent language containing the missions and measures, while accepting the appropriations.

As the Finance Committees worked with the Administration on missions and measures, Senator Parnell filed and passed his third piece of legislation to require budgeting for results. That bill passed and was signed into law by the governor in 1998, the same year the governor vetoed the missions and measures out of the operating budget bill.

Starting with the next session in 1999, the Republican-led Majority began an intensive, cooperative effort to develop missions and measures with which the Administration could agree. After repeated drafts and exhaustive subcommittee meetings, legislators, commissioners and even division directors came to agreement on missions and some measures.

The resulting Senate Bill 169 established missions for all departments and divisions, plus some measures, for fiscal year 2000. Senate President Drue Pearce declared that the bill "... enabled budget subcommittees to point back at substantive law, and hold agencies accountable for results that were jointly negotiated and agreed to by the various departments during budget negotiations."

In 2000, the Alaska Legislature passed SB 281, which substantially completed writing missions and measures for every division and every major program of state government. For example, the mission of the state health department's Division of Public Assistance is "to promote self-sufficiency and provide basic living expenses to Alaskans in need." Some of the measures include: job retention rates among adult welfare recipients; the percentage of adults leaving welfare rolls for jobs; the percentage of welfare recipients also earning income; and the accuracy rate for welfare and food stamp payments.

Missions and measures are already taking hold in Alaska State government. The State of Alaska web page, which includes sites for each department, prominently features departmental missions, including a checklist showing how well each department is meeting its performance measures. It is anticipated that next year's legislative budget subcommittees will continue the work by analyzing the agencies' efficiencies and effectiveness against the measures.

Because the current governor still opposes incorporating the actual missions and measures into the operating budget bill, the Legislature intends to publish a booklet for the public containing a compilation of the budget with the missions and measures incorporated into it. This citizen-friendly publication of the state budget, that presents state department budgets alongside their missions and measures, will enable Alaskans to see exactly where state dollars are targeted, and what measures the Legislature will use to ensure accountability to the public.

The Legislature has recognized that budgeting is about more than just the numbers. It is about how well the money is being spent on behalf of the people. If used to its fullest, results-based budgeting is a significant and powerful tool for good.

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