Howe pleads case for ‘painful’ state budgeting process

The point-person overseeing state government’s budget-crafting process told lawmakers on Wednesday that drawing up the governor’s spending priorities and piecing them together with agency heads for practical implementation takes about eight months.

It’s a process State Budget Director Margaret Kelly said her department works diligently at to deliver everything from narratives of financial impacts to explaining line items. It’s detailed, but it’s worth it, she said.

Rep. Jeff Howe

Rep. Jeff Howe (R-Rockville) wants to upend that process with the promise that it’ll save the state money in the future.

Howe sponsors HF136 which, as amended, would require the state’s executive branch to shift into what’s called zero-based budgeting. Instead of the current process, where top brass work with financial directors to fund their agencies based on current spending levels, along with implementing the governor’s priorities, the bill would require agency chiefs to build their budget from the ground up – to start from zero.

Howe’s proposal would ease different agencies into the process every two years, beginning in 2018. Under the bill, by 2026, the entire Minnesota state government would be zero-based budgeting.

The House State Government Finance Committee laid the measure over for possible omnibus bill inclusion. Its companion, SF65, sponsored by Senate President Michelle Fischbach (R-Paynesville), awaits action by the Senate Finance Committee.

Howe, a former St. Cloud fire marshal who oversaw spending there, unabashedly said he knows it’s a difficult concept, but it’s one worth trying.

WATCH The House State Government Finance Committee discusses the bill 

“It’s a painful process,” Howe said. “I did this myself. But I will tell you, the stuff I found buried in my budget when I went through it was astonishing.

“Having gone through the pain and having gone through the process, I wouldn’t do it any other way.”

Kelly cited a study from the National Conference of State Legislatures that called zero-based budgeting “unworkable,” “impossible” and, on the federal level, “an exercise in futility.” Georgia, under then-Gov. Jimmy Carter, tried it and the study claimed “the advantages,” as Carter pitched them, “appear to have been exaggerated.”

In a fiscal note, Minnesota Management and Budget predicts the legislation would cost the state $12 million in the 2018-19 biennium and $11.3 million in the 2020-21 biennium.

Rep. Mark Uglem (R-Champlin) said he understood the bill was asking for “a major sea change,” and later said, “This could take a generation,” but remained interested in how MMB could implement it.

“I’m not denying this isn’t a cumbersome process … once you’ve done this, and once you’ve gone through this, you have a basis and an understanding that will make budgeting simple,” Howe said.