MONTGOMERY, Ala. — Alabama Senator Larry Stutts (R-Sheffield) says Alabama’s new “zero-based budgeting” method is forcing state agencies to “provide proof, line-by-line, supporting their budget requests.”
To this point, the State of Alabama, similar to the federal government, has used a form of “baseline budgeting.” This means that an agency’s budget appropriation for this year serves as the “baseline” — or starting point — for its appropriation next year, and it goes up from there. Zero-based budgeting, a frequent rallying cry for conservatives on both the state and federal levels, means agencies will start their budgets at $0, thereby forcing them to justify each dollar of their funding requests year after year.
“For decades, agencies have come before the legislature and used the previous year’s budget as a starting point,” Senator Stutts explained. “’Last year, our budget was $5 million, but this year we need $5.3 million because of X, Y, and Z,’ an agency head might say. But obviously, if the previous year’s budget is the baseline, agencies will always request additional tax dollars and voila! The growth of government is never halted or reversed.”
According to Senator Stutts, agency heads are now required to provide as justification for their requests:
1. A detailed description of the agency which includes number of employees and contractors, and its funding sources (state, local, federal, etc… as well as earmarked funds);
2. A breakdown of each program or service provided by the agency, including its source(s) of funding and a summary of citizens served;
3. A line-item breakdown of operational costs to run each office or location; salaries, benefits, contracts, and travel;
4. A list of the agency’s financial assets (including real estate) as well as their debts/liabilities; and
5. Both a funding reduction plan and a cost-savings/efficiency plan.
The new budgeting method was imposed by House and Senate General Fund Budget Chairmen Steve Clouse (R-Ozark) and Trip Pittman (R-Montrose).
“We have directed the Legislative Fiscal Office to request and obtain detailed budget-related information from certain agencies that is in addition to the data typically required each year,” they explained prior to pre-session budget hearings. “The information requested will be based on data that the agency should already have on hand or have access to, and will be used by our committee members and other legislative members during the preliminary budget hearings and during the legislative session in the development of the state budgets.”
In a followup email to House and Senate members, chairmen Clouse and Pittman further explained their intensions.
“This budget cycle will look and feel different from previous years, given the detailed information we will require and the zero-based budgeting method we will utilize,” they wrote. “In the past, agencies have simply requested the same amount of money they received the prior year, plus any additional funding they thought they might need. From this point forward, agencies will start from zero and provide a line-item, department-by-department breakdown of their budget in order to justify their total request.”
Senator Stutts added on Tuesday that moving to zero-based budgeting is an important step toward eliminating waste in state government.
“Zero-based budgeting isn’t meant to produce ‘gotcha’ moments of political theater,” he said. “But the tendency of government agencies is to seek growth and self-preservation. The Legislature has a responsibility to the people of Alabama to root out waste and push state agencies to operate more efficiently. Moving to a zero-based budgeting system is an important step toward that goal.”
2016 is shaping up to be another tumultuous year in Montgomery, coming off the divisive 2015 legislative sessions that fractured Republican lawmakers over tax increases, reforms and cuts.
The 2016 Regular Legislative Sessions is set to begin February 2.