Proposing amendments to the Constitution of the State of Alaska relating to a biennial state budget, to the appropriation limit, and to appropriations from the budget reserve fund..

Updated: February 22, 2000
Contact: Representative Gail Phillips at (907) 465-2689

HJR 2 proposes an amendment to Alaska's Constitution to allow for biennial budgeting, and authorizes the governor to present the legislature with a budget encompassing two fiscal years. As written, the first session of the Legislature would be dedicated to writing a two-year budget. Supplemental budgets could address necessary adjustments, when needed.

Alaska's annual budget cycle is an arduous process, taking up most of the year. Every year hundreds of people from State agencies spend countless hours preparing for budget presentations to the Legislature through hearings, debates and closeouts. There is no doubt that the budget is the single most important piece of legislation that legislators produce for the people of Alaska.

Changing this process to a biennial budget cycle would be very beneficial to our State. Significant cost savings for the Legislature, Administration and the agencies could be achieved as well as far greater efficiencies and productivity by all. Savings are measured in actual dollars and employee productivity. Costs savings are realized in travel and per diem dollars. Significant productivity savings will be achieved in time that can be utilized for programs rather than budget preparation.

Currently a great deal of budget preparation and presentation work occurs during uncompensated overtime hours by exempt employees who are not eligible for overtime pay. The "off budget" year would be far less frenzied than the full budget year and the general analysis work would be of a higher quality. This off year would also allow for more training time and more focus on issues rather than the budget.

A biennial state budget system would allow us to address the budget in the first year of session and focus primarily on legislation in the second year. A biennial state budget process would also work hand-in-hand with the results-based budget concept pursued by the legislature. State agencies would have a chance to initiate advance-planning efforts - something which is very difficult under the present annual state budget system. Alaska would not be unique in adopting a biennial legislative budget cycle.

Research demonstrates that twenty other states operate under a Biennial State Budget system. However, the biennial state budget concept is new to Alaska. Issues for consideration may include preparation time for the "on year" and funding concerns brought to light in the "off year." Resource planning becomes more critical during the initial biennial state budget implementation phase, which should bring greater efficiency to management systems in all agencies. "Off years" would be a great time to deal with things that the Departments do not have time for during the regular year, especially interagency programs and large issues such as welfare reform.

Details such as budget detail formats, funds disbursement in the off year, seasonal adjustments, determining amounts needed for two years and controlling budget policy and decisions through shortened years are basically mechanical and could be worked out through appropriate legislative vehicles. For example, joint special or standing committees and appointments could oversee specific agency activity in the off year. Schedules could be set for agency progress reports rather than lengthy overview presentations year after year. Legislative changes or directives set forth in the off years could establish better and more timely review periods.

A core legislator advisory group could assist and advise agencies through a transition period to determine and ensure that program evaluation and program authorization reviews are accurate or may need to be modified by legislation. Many possible legislative vehicles are available to work through adjustments and revisions in a biennial state budget system. Other states' biennial budget models also exists as viable guides for implementing a transition plan and facilitating our state into a biennial state budget system. The Legislature loses no control over the budget process by changing to a biennial budget cycle.

Above all, sound public policy is paramount to a smooth transition into a new state budget system. Legislative control over the process is mandatory in a biennial state budget system. This may suggest a legislative transition team composed of joint member legislators, and the Administration.

In my opinion and as proven in other states where the biennial cycle is already in place, the greatest benefit of a biennial budget process is the increased efficiency and productivity that can be achieved by State agencies. Alaskans statewide constantly implore us to become more efficient and increase our productivity. Besides achieving these goals, and the actual costs savings of approximately $2.5 million, associate with a shortened session in the second year, the proposed biennial budget system is a win -win concept for Alaska.