03/18/2025 03:30 PM Senate STATE AFFAIRS

           SB  37-STRATEGIC PLANS FOR STATE AGENCIES                                                                        
                                                                                                                                
4:32:33 PM                                                                                                                    
CHAIR KAWASAKI announced the consideration  of SENATE BILL NO. 37                                                               
"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."                                                                                                             
                                                                                                                                
4:32:55 PM                                                                                                                    
SENATOR  JAMES KAUFMAN,  District  F,  Alaska State  Legislature,                                                               
Juneau, Alaska, sponsor of SB 37. He  said SB 37 aims to create a                                                               
better management  framework for state agencies  through improved                                                               
planning  and  execution.  There  hasn't been  much  change  from                                                               
similar legislation  from past sessions.  He said the  core issue                                                               
is  that Alaska  often  ranks  near the  bottom  in state  agency                                                               
performance   metrics.   This   proposal   introduces   four-year                                                               
strategic  operating plans,  updated  every two  years, to  guide                                                               
annual funding and agency discussions.  The goal is to shift from                                                               
reactive problem-solving  to long-term improvement. SB  37 offers                                                               
a structure to  help agencies move toward  better performance. He                                                               
stated that the process is  simple: the governor sets priorities,                                                               
agencies  submit their  four-year  plans, and  budgets are  built                                                               
around those plans.                                                                                                             
                                                                                                                                
4:35:29 PM                                                                                                                    
CHAIR  KAWASAKI asked  how the  legislature decides  on the  best                                                               
metrics to  use to figure out  if the state agency  is doing well                                                               
or not.                                                                                                                         
                                                                                                                                
4:35:51 PM                                                                                                                    
SENATOR KAUFMAN responded  that the most effective  way to select                                                               
the  best metrics  is to  rely on  the individual  performing the                                                               
work,  as they  possess the  necessary understanding  to identify                                                               
the appropriate  metrics. He said instead  of locking performance                                                               
standards  into statute,  the legislature  should set  goals, and                                                               
agencies should  figure out  how to achieve  them. This  leads to                                                               
plans and  metrics being revealed  and will guide  annual funding                                                               
discussions.                                                                                                                    
                                                                                                                                
4:37:14 PM                                                                                                                    
EMMA  TORKELSON,  Staff,  Senator  James  Kaufman,  Alaska  State                                                               
Legislature, Juneau, Alaska, provided  a summary of the sectional                                                               
analysis for SB 37:                                                                                                             
                                                                                                                                
[Original punctuation provided.]                                                                                                
                                                                                                                                
          Sectional Analysis for SB 37  Bill Version A                                                                        
                                                                                                                              
     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.                                                                       
                                                                                                                              
     Section 1: Is a conforming  change to reference the new                                                                  
     planning structure created later in the bill.                                                                              
                                                                                                                                
     Section  2:  Are  several  language  changes  to  align                                                                  
     earlier  sections of  the Executive  Budget Act  to the                                                                    
     new sections created later in the bill.                                                                                    
                                                                                                                              
     Section 3  & 4: Makes agencies  responsible for setting                                                                  
     their  mission  statements   and  performance  measures                                                                    
     (rather than the legislature). Adds  a reference to the                                                                    
     plan structure  created later in  the bill.  It further                                                                    
     directs the  legislature to use the  mission statements                                                                    
     and performance measurements  determine if the agencies                                                                    
     goals are being achieved.                                                                                                  
                                                                                                                                
     We  believe  providing  agencies with  the  ability  to                                                                    
     write   and   communicate   both  will   increase   the                                                                    
     likelihood  that  agencies  will make  progress  toward                                                                    
     their goals.                                                                                                               
                                                                                                                              
4:38:26 PM                                                                                                                    
MS. TORKELSON continued with the sectional analysis:                                                                            
                                                                                                                              
     Section  5:  Updates  language to  reference  strategic                                                                  
     plans created later in the bill.                                                                                           
                                                                                                                              
     Section   6:  Makes   changes  to   clarify  that   the                                                                  
     legislature  is to  refer to  strategic plans,  mission                                                                    
     statements,  and  financial   plans  in  our  budgeting                                                                    
     process.                                                                                                                   
                                                                                                                              
     Section  7: Makes  changes to  clarify that  each state                                                                  
     entity shall:                                                                                                              
                                                                                                                                
             1.Allocate resources to implement multi-year                                                                       
              plans.                                                                                                            
             2.Express program results in measurable terms                                                                      
             3.Measure progress towards multi-year plans and                                                                    
              other results                                                                                                     
             4.Promote activities consistent with multi-year                                                                    
              plans that reduce future costs.                                                                                   
            5.Plan for both the short- and long-term                                                                            
             6.Require accountability at all levels for                                                                         
              meeting multi-year plans.                                                                                         
           7.Adds a reference to strategic planning.                                                                            
             8.Requires quarterly reporting to OMB on                                                                           
              progress towards the performance plan.                                                                            
                                                                                                                                
     Section  8: Defines  "state  entity"  as all  executive                                                                  
     branch departments and the university of Alaska.                                                                           
                                                                                                                                
     Section  9: Directs  the Governor's  to review,  revise                                                                  
     (if  he  or she  would  like  to) and  approve  mission                                                                    
     statements, strategic plans,  performance and financial                                                                    
     plans. It further  directs the governor to  use them to                                                                    
     execute the law and achieve the desired goals.                                                                             
                                                                                                                                
     Section  10: Is  a conforming  change to  reference the                                                                  
     new planning structure created by SB 37                                                                                    
                                                                                                                                
4:40:09 PM                                                                                                                    
MS. TORKELSON continued with the sectional analysis:                                                                            
                                                                                                                                
     Section 11:  Adds the  new plans  created later  in the                                                                  
     bill to the  list of things OMB is  responsible for. It                                                                    
     further  clarifies  OMB's  role  in  the  hierarchy  of                                                                    
     planning and reporting.                                                                                                    
                                                                                                                                
     Section 12: Repeals and Reenacts AS 37.07.050.                                                                           
             1.It requires each executive branch department                                                                     
              and  the University  of Alaska  to develop  4-                                                                    
              year strategic  plans that are consistent with                                                                    
              the  agency's  authority  and  the  governor's                                                                    
              statewide  priorities.  These  plans  must  be                                                                    
              updated and  submitted to OMB at the beginning                                                                    
              of  each  gubernatorial  term and  updated  at                                                                    
              least once every two years.                                                                                       
                                                                                                                                
             2.It outlines what needs to be in the plans,                                                                       
              OMB's  role in the creation of  the plan, what                                                                    
              happens  if an  agency doesn't submit  a plan,                                                                    
              and  clarifies  that all  of  these plans  are                                                                    
              public information.                                                                                               
                                                                                                                                
     Section  13:  creates  a new  section  for  Boards  and                                                                  
     Commissions.  We did  not feel  it  was appropriate  to                                                                    
     have every  board and commission create  the same level                                                                    
     of strategic plans as each  department, so this section                                                                    
     outlines what information will  be required from Boards                                                                    
     and Commissions each year.                                                                                                 
                                                                                                                                
     Section 14:  Amends the current section  to require the                                                                  
     governor   to   identify   three  to   five   statewide                                                                    
     priorities to  guide each agency's  four-year strategic                                                                    
     plan and their annual plans.                                                                                               
                                                                                                                                
     Section  15:  Requires  the  governor  to  present  the                                                                  
     strategic   plans  and   mission   statements  to   the                                                                    
     legislature  during his  regular  budget  address to  a                                                                    
     joint session.                                                                                                             
                                                                                                                                
     Section 16: Adds reference to  the new plans created in                                                                  
     Section  12 and  13 to  the list  that the  legislature                                                                    
     reviews as part of the budget process.                                                                                     
                                                                                                                                
     Section 17: Adds  a reference to the  new plans created                                                                  
     in Section 12 and 13 and removes old language.                                                                             
                                                                                                                                
4:42:25 PM                                                                                                                    
MS. TORKELSON continued with the sectional analysis:                                                                            
                                                                                                                                
     Section  18: Clarifies  that salary  increases must  be                                                                  
     done in accordance with the plans.                                                                                         
                                                                                                                                
     Section  19:  Requires  each agency  to  develop  (with                                                                  
     employee  participation)  an   annual  performance  and                                                                    
     financial  plan consistent  with the  4 year  strategic                                                                    
     plan  and  submit  them to  the  legislature  with  the                                                                    
     budget by December 15.                                                                                                     
                                                                                                                                
     Further  outlines  what  should   be  included  in  the                                                                    
     performance  plan  and  the  financial  plan,  outlines                                                                    
     OMB's role,  what happens if an  agency doesn't prepare                                                                    
     a  plan,  and  clarifies  that  the  plans  are  public                                                                    
     information.                                                                                                               
                                                                                                                                
     Section  20:  Defines  the  terms  "goal,"  "objective,                                                                  
     "performance measure," and "strategic plan."                                                                               
                                                                                                                                
     Section  21:  Is  a  conforming  change  to  include  a                                                                  
     reference to  the new  Boards and  Commissions planning                                                                    
     requirements created in section 13.                                                                                        
                                                                                                                                
     Section  22:  Is  a  conforming   change  to  remove  a                                                                  
     reference to the old method of planning.                                                                                   
                                                                                                                                
     Section 23: Sets a July 1, 2025, effective date.                                                                         
                                                                                                                                
4:44:22 PM                                                                                                                    
SENATOR KAUFMAN stated  that his office has worked  with past and                                                               
present  Office of  Management and  Budgeting (OMB)  directors to                                                               
refine  and  realign  existing   efforts,  not  create  something                                                               
entirely new.  SB 37 builds  on work already being  done, modeled                                                               
after successful practices from  the federal government and other                                                               
states,  but tailored  to Alaska's  needs.  The goal  is to  move                                                               
beyond one-year  budget cycles and  work with a  clear, long-term                                                               
strategic  vision to  guide decisions  and improve  outcomes year                                                               
after year.                                                                                                                     
                                                                                                                                
4:46:09 PM                                                                                                                    
CHAIR  KAWASAKI asked  how the  legislature ensures  the governor                                                               
and OMB  directors comply  with the  reporting and  requests that                                                               
are defined in the legislation.                                                                                                 
                                                                                                                                
4:46:20 PM                                                                                                                    
SENATOR KAUFMAN answered that the  legislature holds the power of                                                               
the purse, and  the strength of SB 37 is  that budget discussions                                                               
will  be tied  to a  clear, public  multi-year plan.  If agencies                                                               
fall  short of  their stated  goals, it  will be  much harder  to                                                               
justify   because  the   expectations   and   progress  will   be                                                               
transparent. He  said this framework ensures  more accountability                                                               
and long-term focus on budgeting decisions.                                                                                     
                                                                                                                                
4:47:24 PM                                                                                                                    
CHAIR KAWASAKI opened public testimony on SB 37.                                                                                
                                                                                                                                
4:47:41 PM                                                                                                                    
ED  MARTIN,  representing  self,   Kenai,  Alaska,  testified  in                                                               
support of  SB 37 and  stated he appreciates the  thought Senator                                                               
Kaufman put  into the bill,  it's well-crafted and  promising. He                                                               
said he is concerned about  the fiscal note; implementing it will                                                               
require  time, staff,  and possibly  new programs,  especially in                                                               
already stretched departments.  He said he hopes and  hopes for a                                                               
clear, honest assessment of the true costs involved.                                                                            
                                                                                                                                
4:50:05 PM                                                                                                                    
SENATOR KAUFMAN  responded that  he has  worked with  several OMB                                                               
directors who  confirmed SB 37  is more a realignment  of current                                                               
processes than a new burden.  Past legislatures did not receive a                                                               
fiscal  note  for  this  reason,  and  once  the  legislation  is                                                               
understood, it will  be clear that it builds  on existing efforts                                                               
to produce better  results. He said SB 37 can  be integrated into                                                               
what the executive branch already does.                                                                                         
                                                                                                                                
4:51:12 PM                                                                                                                    
CHAIR KAWASAKI held SB 37 in committee.