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Zero-based budgeting approved

Published (1/28/2011)
By Nick Busse
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Lawmakers would have to begin building the state’s biennial budget from scratch, if a bill approved by a House committee becomes law.

Sponsored by Rep. King Banaian (R-St. Cloud), HF2 would require the state to use zero-based budgeting. In this method of budgeting, the base funding level for every state agency is assumed to be zero. Agencies present a “decision package” for lawmakers, detailing every individual activity the agency carries out and providing three funding options: the minimal level, the current level and the desired level.

The House Government Operations and Elections Committee approved the bill and referred it to the House State Government Finance Committee. Sen. Roger Chamberlain (R-Lino Lakes) sponsors the companion, SF146, which awaits action by the Senate State Government Innovation and Veterans Committee.

Banaian said one advantage of zero-based budgeting is that it engages personnel at state agencies who can provide input on where money would be best spent.

“The Legislature can’t reach down into an agency and find that mid-level manager that knows how to save $10,000 on a supply budget,” he said.

The bill would instruct state budget officials not to forecast expenditures beyond the end of the current fiscal biennium. Forecasts currently include information on both projected revenues and expenditures into the next two fiscal biennia.

Some members suggested zero-based budgeting is impractical. Rep. Mike Nelson (DFL-Brooklyn Park) said some agencies, like the Department of Corrections, can’t be eliminated.

“We have prisoners in jail, and they have to be guarded, and there’s going to be costs there. And to say, ‘Well, at the end of the biennium, that’s going to go away’ seems a little disingenuous,” Nelson said.

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