Alabama moving toward zero-based budgeting, requiring agencies to justify spending

MONTGOMERY, Ala. — Alabama House and Senate budget chairmen signaled Monday they are preparing to move the state toward zero-based budgeting, which would ratchet up scrutiny on state agencies and require them justify their budget requests each year.

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.

House General Fund Budget Chairman Steve Clouse (R-Ozark) and incoming Senate General Fund Budget Chairman Trip Pittman (R-Montrose) wrote a letter to state General Fund agencies, commissions and departments alerting them that pre-legislative session budget hearings will begin on Jan. 12th, roughly a month before the 2016 Regular Legislative Session.

In the letter, chairmen Clouse and Pittman also notified agency and department heads that the legislature will be asking them for more detailed information than they have in years past.

“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. “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.”

The requests being made of various state agencies include:

• 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);
• A detailed breakdown of each program or service provided by the agency, including its source(s) of funding and a summary of clients served;
• A line-item breakdown of all FY15 expenditures and FY16 budgeted expenses including operational costs to run each office or location; salaries, benefits, contracts, and travel;
• A list of the agency’s financial assets (including real estate) as well as their debts/liabilities;
• A line-item breakdown of the anticipated FY17 budget requests, starting from zero and culminating in the total anticipated request, providing justification for each item;
• Both a funding reduction plan and a cost-savings/efficiency plan.

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.

Governor Robert Bentley has indicated he may pursue more tax increase proposals, as well as a controversial Medicaid expansion plan. But the latest moves from the top budget makers could indicate a renewed commitment to belt-tightening in the legislature.

Alabama moving toward zero-based budgeting, requiring agencies to justify spending https://t.co/ZHQCOHCyJz

— Cliff Sims (@Cliff_Sims) November 24, 2015