Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/14/2023 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB46 | |
| SB21 | |
| SB9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 46 | TELECONFERENCED | |
| *+ | SB 21 | TELECONFERENCED | |
| *+ | SB 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 21-STRATEGIC PLANS FOR STATE AGENCIES
4:01:47 PM
CHAIR KAWASAKI reconvened the meeting and announced the
consideration of SENATE BILL NO. 21 "An Act relating to the
Executive Budget Act; relating to strategic plans, mission
statements, performance plans, and financial plans for executive
branch agencies; and providing for an effective date."
He stated this was the first hearing and the intention was to
hear the introduction, take invited and public testimony, and
hold the bill for future consideration.
He asked Mr. Steininger to provide an overview of the current
budget process.
4:02:22 PM
NEIL STEININGER, Director, Office of Management and Budget
(OMB), Department of Administration, Juneau, Alaska, stated that
he was asked to review the current budget process and the
documents that are included with the budget to explain what the
agencies are doing with the money the legislature appropriates.
He explained that the budget cycle the public sees begins when
the governor releases the budget on December 15, continues when
the legislature convenes in January, and completes when the
legislature passes the budget and returns it to the governor.
For the executive agencies, the budget is a year-round process.
OMB works with state agencies to review the budget that passed,
makes plans to execute the appropriations, and makes
recommendations to the governor about potential veto actions.
OMB works with the state agencies throughout the summer to
understand needed realignments that are within OMB's statutory
authority to make internally. The end product is the Management
Plan, which is also the starting point for the next year's
budget. It's analogous to what Legislative Finance calls the
Adjusted Base Budget. This is produced in the same time period
that agencies are closing their prior fiscal year's budget.
Towards the end of July, OMB issues a Guidance from the Governor
memo that informs state agencies about the executive's
expectations for the next year's budget. Thereafter, the
agencies develop and present their proposed budgets to OMB in
the September timeframe. Throughout the process, agency staff
has been working to provide the technical work and backup
documentation that is additional information on the core mission
and deliverables of each department. This work product is
referred to as the Budget Books. This documentation, which is
laid out in statute, is what SB 21 seeks to amend.
MR. STEININGER explained that the Budget Books currently
reference the statute attached to a given budget component and
lists the existing or future challenges that impede achieving
that component objective. The Budget Books also contain detailed
reports about how the positions in a component are spent, the
planned expenditures, expenditures in prior years, and
descriptions of the year-over-year changes in the budget
proposed by the governor.
He described the performance measures in the Budget Books as
inconsistent in value. Every state agency is supposed to provide
performance measures that give objective statistics on how well
the agency is delivering on their statutory missions. Some, but
not all, of the information is useful to the budgeting process.
Internally, OMB challenges state agencies to review the
information in the Budget Books and improve their performance
measures, but that's not always a high priority during a busy
time. Ultimately, that information is the primary documentation
for the public to understand what's done with the appropriations
and the reason for current requests.
4:12:33 PM
SENATOR CLAMAN asked whether the performance measures were
written in statute, established by regulation, or metrics the
departments believe are reasonable.
MR. STIININGER replied that statute requires a system to measure
performance. The system is a web portal that OMB maintains, but
the measures are set by the agencies. What he's seen over eight
legislative sessions is that the quality of the information is
dependent on the culture of the given department and the
commissioner's focus.
SENATOR CLAMAN asked whether the measures the department
determines are important are put into regulation or simply
internal documents that could change at any time.
MR. STEINGER replied that the measures that are on the website
or in the Budget Books could change the following year.
4:15:53 PM
SENATOR JAMES KAUFMAN, District F, Alaska State Legislature
Juneau, Alaska, sponsor of SB 21, stated that his goal today is
to make performance management, budgeting, and strategic plans
exciting. He briefly summarized the sponsor statement that read
as follows:
SB 21 reorganizes the Executive Budget Act (EBA) to
better integrate the planning and budgeting processes
used by the executive and legislative branches. Alaska
is often in the news for the wrong reasons. When
national rankings of performance metrics in key social
and economic areas are released, we often come in
close to the bottom. This is true for education,
health, public safety, and many other critical areas.
We spend billions to serve a relatively small
population, but somehow improvement seems elusive
sometimes impossibleto achieve. We live in a
beautiful and truly amazing state, but the performance
of our state programs has not done justice to our
potential.
The State of Alaska is a vast and complex multi-
billion-dollar enterprise, but we do not have a well-
developed and fully integrated Operations Management
System and Quality Management System (OMS/QMS). We
have fragments of an appropriate enterprise-scale
performance management system, but nothing that can
properly manage an enterprise of our magnitude.
So, the question is: How can we start to drive a
higher level of performance in our state agencies? How
can we rise to meet our many challenges while
simultaneously successfully improving the cost to
benefit ratio of our programs?
Fortunately, the answer to that question is available,
and has been successfully implemented by high
performing organizations in both the public and
private sector. We have adapted those successful
systems into SB 21 as it is today. SB 21 reorganizes
the Executive Budget Act. Under the new system, every
annual budgeting cycle will occur within the framework
of a 4-year strategic plan, biennial updates to that
strategic plan, and yearly performance management &
execution plans. The people managing and doing the
work will set goals, objectives, and key performance
metrics that honor the legislative intent confirmed
with every budget cycle. That way, each year, the
legislature will consider department budgets that are
aligned with strategic and performance plans.
Transitioning to this form of planning, budgeting, and
performance management will put us on a path towards a
more efficient and stronger future. Our Operations
Management System will guide how our enterprise runs,
while the Quality Management System will address how
we continually improve and how those improvements are
sustained. SB 21 does not provide an instant cure for
all problems. But by reforming the EBAwhich is the
foundation of how we plan, manage, measure, and fund
our programswe will be able to pursue other, more
comprehensive continuous improvement processes that
will lead to a better future for Alaska.
4:18:46 PM
MATHEW HARVEY, Staff, Senator James Kaufman, Alaska State
Legislature, Juneau, Alaska, presented a PowerPoint during the
introductory hearing on SB 21 relating to strategic planning,
budgeting, execution, and reporting to improve outcomes and
address longstanding performance and management issues.
MR. HARVEY began on slide 2 with an overview of the
presentation.
• Problem Statement
• Current State
o AS 37.07 The Executive Budget Act (EBA)
• Proposed Future State: SB 21
o Structural Changes to AS 37.07
o Plan Content Summaries
o Boards and Commissions
• Benefits
• Examples
MR. HARVEY advanced to slide 3, "Problem Statement," and spoke
to the following:
• Alaska's management of programs and projects has not
been as strong as many citizens expect from their
government
• Alaska consistently scores lower than other states
in key metrics
o e.g. No. 45 overall in US News' best states
square4 https://www.usnews.com/news/best-states/alaska
o e.g. Received a C- Report Card for Infrastructure
by ASCE
square4 https://infrastructurereportcard.org/state-
item/alaska/
• Alaska has fragments of an appropriate enterprise-
scale management system, but not something that
cohesively blends operational, performance, and
quality management
• How can we start to drive a higher level of
performance while successfully improving our overall
cost/benefit ratio?
4:20:29 PM
MR. HARVEY continued to slide 4, "Current Executive Budget Act,"
and reviewed the following:
• Title 37: Public Finance
• Chapter 07: Executive Budget Act
Sec. 37.07.010. Statement of policy.
It is the purpose of this chapter to establish a
comprehensive system for state program and financial
management that furthers the capacity of the governor
and legislature to plan and finance the services that
they determine the state will provide for
• Describes the role of the legislature, OMB, and the
governor in the budgeting and program execution process
• Includes two sections which deal mainly with planning and
performance
o 37.07.050 Agency program and financial plans; mission
statements
o 37.07.080 Program Execution
4:21:30 PM
MR. HARVEY advanced to slide 5, "Proposed Future State: SB 21,"
and spoke to the following:
• Responsibility Change (Measures/targets set by
executive branch)
• Planning Hierarchy and increased organization
o Statewide Priorities (3-6 long-term priorities
set by governor)
o Strategic Plans (4-year plan, updated at least
every two years)
square4 Mission, goals, and objectives for each agency
o Performance Plans (Annual Plan)
square4 Program structure and performance
history/targets
o Financial Plans (Annual Plan)
square4 Financial History and Budget information
• Transparency and Reporting
o Quarterly Performance Reports: Progress towards
targets
o All plans and reports are posted on a single,
public website
4:22:40 PM
MR. HARVEY explained that slide 6 is a graphic that illustrates
the hierarchy of plan locations and planning cadence.
Plan Location includes:
Governor's Recommendations,
Agency Strategic Plans, and
Performance and Financial Plans
Planning Cadence includes:
Long-term priorities submitted annually with budget and rarely
updated,
4-year plans that are updated every 2 years, and
Annual plans
4:23:06 PM
MR. HARVEY advanced to slide 7, "Structural Changes to AS
37.07," and spoke to the following:
• Title Change of AS 37.07.016: Governor's use of
strategic plans, mission statements, and performance
plans
• Title Change of AS 37.07.050: Agency strategic
plans; mission statements
o Refocuses this section on strategic plans and
changes title due to moving performance and
financial information
• New Section AS 37.07.055: Specific requirements for
Boards/Commissions
• New Section AS 37.07.085: Performance and Financial
Plan section
4:24:21 PM
MR. HARVEY advanced to slide 8, "Agency Strategic Plans AS
37.07.050," and reviewed the following:
• 4-Year Strategic Plans submitted at the beginning of
each gubernatorial term
• Updated at least once every two years
• Includes:
o Description of strategic plan and mission
statement
o 3-6 goals for the agency
o Specific, measurable, realistic, and timely
objectives
o Methods of gathering user group opinions
o Population served by the agency and population
trends
o Key external factors that could affect progress
o Required legislation and regulatory changes
4:25:21 PM
MR. HARVEY advanced to slide 9 "Agency Performance Plans New AS
37.07.085(b)," and spoke to the following:
• Annual Plan submitted to Legislature by December
15th of each year
• Includes:
o Description of the agency's program structure and
proposed changes
o Identification of each program's constitutional
or statutory authority
o A program purpose statement: describes the
services provided, customers served, and the
benefit or intended outcome of the program
o Identify performance measures aligned with
strategic plan
square4 Identify goals and objectives that the measures
correspond to
o Identify results for each performance measure
over the past four years
o Identify performance targets for each measure for
the next fiscal year
4:26:28 PM
MR. HARVEY advanced to slide 10, "Agency Financial Plans New AS
37.085(c)," and described the following:
• Annual Plan submitted to Legislature by December
15th of each year
• Includes:
o Revenue and expenditures for each program for
prior four fiscal years
o Breakdowns: Amounts received by each revenue
source and expended on each type of expenditure
o Estimates of revenue and expenditures for current
and next fiscal year
o Budget requested for succeeding fiscal year
o Number of positions employed or under contract
o Cost of services provided by each program
o Report of receipts made last year, estimates for
current and next year
o Other Information (expenditures authorized,
required legislation, etc.)
4:27:16 PM
MR. HARVEY advanced to slide 11, "Boards and Commissions New AS
37.07.055," and described the following additions:
• Creates a section specific for Boards and
Commissions
• Boards and Commissions must annually provide a
financial plan:
o Budget requested for next year
o Expenditures made last year, authorized this
year, and proposed for next year
o Explanation of services to be provided next year,
including need for and cost of services
o Number of total positions employed or under
contract by the board or commission
o A report of receipts made last fiscal year and
estimated for the current and next fiscal year
o Identified legislation
• Boards and Commissions must annually provide a plan
for operation of programs
• Boards and Commissions shall develop a method of
measuring results
• A closeout report is required upon termination of
the board, commission, and agency programs related
to the board or commission
4:28:22 PM
MR. HARVEY advanced to slide 12, "Benefits," and provided the
following high-level overview:
• Align the strategy of all agencies with a governor's
statewide priorities
• Link short term tactics/funding to mid-range,
department-level strategy
• Push responsibility for defining measures and
targets to the executive branch. The people closest
to the customers of services
• Reduce duplication of goal-setting and financial
information at a program or component level
• Increase the level of detail regarding program
structure and program definition
4:29:07 PM
MR. HARVEY advanced to slide 13, "Examples," and described the
following:
• Federal Government (GPRAMA)
o https://www.gao.gov/leading-practices-managing-
results-government
• AZ Strategic Plans: https://azospb.gov/
• North Carolina:
o https://www.osbm.nc.gov/operational-
excellence/strategic-planning/strategic-
planning-guide
• New Mexico: Accountability in Government Act
o https://www.nmlegis.gov/entity/lfc/Documents/
Accountability_In_Goverment_Act/
Legislating%20For%20Results.pdf
• Other Guides
o https://www.osc.state.ny.us/files/local-
government/publications/pdf/strategic_
planning.pdf
o https://www.urban.org/sites/default/files/
publication/62616/410067-State-
Approaches-to-Governing-For-Results-and-
Accountability.PDF
4:30:08 PM
SENATOR WIELECHOWSKI asked Mr. Steininger whether he supports
the bill and thinks it will make his job easier and whether it's
feasible and would be helpful for future planning.
MR. STEININGER answered that the administration does not have an
official position on the bill. His observations were that some
of the things in the Budget Books don't add as much value as
they could; some of the work that's drafted in the books is
duplicative; and some of the work inserted by analysists and
agencies isn't used in the budget deliberation process. To the
question about whether the bill would benefit the state, he said
he believes that it's beneficial to look at whether the
legislature and public is using what agencies are required to
produce for budget deliberations.
4:32:35 PM
SENATOR WIELECHOWSKI commented that the goal of improving
government efficiency and productivity has merit. He asked Mr.
Steininger to comment on whether the state was operating at
optimal efficiency.
MR. STEININGER replied that he couldn't say that that the state
would ever be 100 percent efficient. He supports having a
mechanism to look at whether things are being done well. He
noted that OMB requested a position for an internal auditor to
look at whether the work being done by the agencies was
achieving the intended goal. SB 21 seems to be a bill that could
help that process.
4:34:17 PM
SENATOR CLAMAN asked if there was anything in SB 21 that a
department couldn't do today in terms of developing new or
changing existing performance metrics.
MR. STEININGER responded that departments currently could
improve their performance metrics and some agencies have worked
to do that within the existing statutory structure. He restated
that this only happens when a particular commissioner has the
organizational mindset to effectuate such a change. By contrast,
SB 21 seems to mandate that focus and effort.
SENATOR CLAMAN observed that regardless of the mandate, it would
likely come down to how much the departments want to do.
MR. STEININGER agreed.
4:37:32 PM
SENATOR CLAMAN asked the sponsor what the bill adds that
couldn't be done today if the governor wanted to push improved
performance metrics.
SENATOR KAUFMAN explained that the bill creates a standardized
improved management framework for setting key goals and
objectives. When governments and corporations have a good
structure, the key goals and objectives flow down and strategic
management plans come back up, are evaluated, and operating
plans are set. This creates a conveyor belt for performance that
is standard across the entire executive branch. It's not that
this doesn't exist today, but not as a standardized performance
management framework for operations. This standardization
provides the opportunity to incrementally improve the management
structure across the entire executive branch.
4:40:48 PM
SENATOR MERRICK asked whether aligning the strategic plans with
the gubernatorial terms might create unnecessary political
overtones as opposed to the off years.
SENATOR KAUFMAN acknowledged that timing was an important
consideration and that separation of powers was another area
that needed more attention.
4:43:36 PM
CHAIR KAWASAKI opened public testimony on SB 21; finding none,
he closed public testimony.
SENATOR KAUFMAN thanked the committee for hearing the bill.
4:44:08 PM
CHAIR KAWASAKI held SB 21 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 9 ver A.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |
| SB 9 Supporting Document - LRS Report 19.010m 03.06.23.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |
| SB 9 Sectional Analysis Ver A 03.06.23.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |
| SB 21 Sponsor Statement Version A 1.25.23.pdf |
SFIN 3/12/2024 1:30:00 PM SSTA 3/14/2023 3:30:00 PM |
SB 21 |
| SB 46 Version A 03.08.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB 46 Research BIAA 2022 Legislative Issue Briefs 3.1.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB 46 Research Unmasking Brain Injuries 3.1.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB0021A.PDF |
SSTA 3/14/2023 3:30:00 PM |
SB 21 |
| SB21 EBA Presentation.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 21 |
| SB 21 EBA One-pager handout.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 21 |
| SB 9 Sponsor Statement 03.06.23.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |
| SB 21 Fiscal note.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 21 |
| SB 46 Fiscal Note VAR-EXE 03.10.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB 9 fiscal note.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |
| SB 46 Sponsor Statement 3.1.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB 46 Sectional Analysis 3.1.2023.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 46 |
| SB 9 Presentation v1.3.pdf |
SSTA 3/14/2023 3:30:00 PM |
SB 9 |