SB 76 - STATE LONG-TERM PLANNING SENATOR PARNELL presented SB 76, which, he said, fosters government that gets results and encourages communication between the Legislature and the Administration. He said this legislation amends the Executive Budget Act to foster results-based government. He explained the bill empowers the Legislature to establish mission statements and desired results for the Administration. SENATOR PARNELL stated that the guts of the bill mandates the legislature allocate the state's resources for effective and efficient public service by clearly identifying desired results, setting priorities, assigning accountability and using methods for measuring, recording and reporting results. SENATOR PARNELL commented that for too long the system has been mushy and that because of this, discussions of policy never even occur. He hopes this bill will set forth a state policy where the focus on is getting results. MR. JACK FARGNOLI, representing the Office of Management and Budget (OMB) stated that his testimony is essentially unchanged from his comments previously. He said he could not agree more with the concept of the bill but is concerned with some legal issues and fears it may be difficult to meld Legislative and Executive efforts into an orderly budget. MR. FARGNOLI also said the bill's timing is premature and he expressed concern with the vague usage of the term "mission statement." He does not know exactly how the process of issuance of these mission statements would occur or what the intent behind this provision is. JACK FARGNOLI said his understanding is the Legislature fulfills its plenary powers in the enactment of legislation and the Governor fulfills his plenary powers in the process of providing guidance for these laws. He said something in between these might be desirable, but he's unable to tell from the bill. MR. FARGNOLI expressed uncertainty of what would be left in statute and worry over the resulting confusion he envisions. He proposed this area of the bill needs to be firmed up and said he would leave discussion of the legal issues to MR. JIM BALDWIN from the Department of Law. CHAIRMAN GREEN asked for clarification of his primary concern and he explained it was the phrase "issue a mission statement." He said he did not know if this was meant to be a statutory process and how it would be handled. His concern is the possible problem resulting from a mission statement conveyed from the Legislature that is contradictory to a department's existing mission statement in statute. MR. JIM BALDWIN, from the Department of Law, began by saying he likes the concept of results-based budgeting and has seen it gain widespread national support. He explained that the problem with the bill is constitutional. Article 2, section 13, of the Alaska Constitution limits what can be done in an appropriation bill. He said it is unclear whether the intent of the bill is to have this mission statement included in the appropriation's bill, and said this would cause a problem as an appropriation bill must be confined to appropriations. He said this confinement provision is fairly unique to Alaska and makes it difficult to relate other states' experience to ours. He concluded that this is such a good concept, he would not want to see it bogged down in a debate over the meaning and effect of intent statements in the budget. MR. BALDWIN said his reading of the word issue in the bill, with the knowledge that the job of the Legislature is to enact legislation, says the issuance of a mission statement would affect an agency's mission by affecting what law it operates under. MR. BALDWIN said a mission statement might be enacted into law, which is within the power of the Legislature, or that it might be done by regulation with a collaboration of both Legislative and Administration input. He offered the committee a copy of the Florida bill as an example of how another state has approached this collaborative method. MR. BALDWIN discussed other issues within the bill. He mentioned the truth in budgeting provision and said this would be a problem if it were enacted into law. He remarked that the Administration has no trouble with being truthful in budgeting, but said it is a matter of definition as to when a deficit is a deficit. He observed that the Governor's power to submit a budget derives from the Constitution and he questions the validity of a statute that tells the Governor how to characterize his own budget. He believes this is a matter of separation of powers, and this appears to be an attempt to define a purely Executive power by statute. MR. BALDWIN said the repeal in section 10 of the bill is appropriate and consistent with a court ruling which determined that statute invalid. CHAIRMAN GREEN noted that enacting a mission statement into law might be problematic, as she assumes mission statements are somewhat fluid over time. MR. BALDWIN said the establishment of a mission statement is a blend of Executive and Legislative powers and one of the concerns is that the bill does not specify whether the process could be characterized as top down or meeting in the middle. He would anticipate problems with a top down process in such a complex issue. He stated that some aspects of a mission statement may not be amenable to being put into statute. He also noted the possible dilemma that would result from a mission statement that conflicts with statute. SENATOR WARD asked if the Florida bill is currently law. MR. BALDWIN did not know, but said he was interested by it because of the collaborative process it employs in creating mission statements. He found it on the Internet. SENATOR WARD said the process does not work unless there is cooperation. MS. CHERYL FRASCA, a former budgeteer, came forward to speak to the value of the Legislature expressing its expectations regarding the information on performance and results that is being requested in SB 76. TAPE 98-8, SIDE B Number 001 MS. FRASCA emphasized the importance of having the Legislature work with the Governor for a framework and a process to use information to make better budget decisions. She wanted to lend support for legislation that will lay out this framework. SENATOR PARNELL appreciated this discussion. He indicated that the Legislature is the policy making body of the state and is a coequal power, not a top down body. With respect to the Executive branch, he said this is not an attempt to step on their veto power and rule-making power, only to say that the Legislature is going to establish policy. SENATOR PARNELL answered the question raised about the issuance of a mission statement, saying he purposefully left the bill flexible in an attempt to establish a collaborative process and foster discussion with the agencies. SENATOR PARNELL believed MR. BALDWIN thought a mission statement would be included in an appropriation bill due to the word "legislation" appearing on page 2, line 12. SENATOR PARNELL suggested this word should be changed to "Legislature." He said his bill is flexible enough to put missions and desired results in statute or be enacted as intent language. CHAIRMAN GREEN asked what would happen if there was a conflict between a department's statutory responsibilities and a given mission statement. SENATOR PARNELL replied that departments' missions are somewhat defined in statute and mission statements must be in compliance with that law or the law could be changed. He said there could be no conflict. SENATOR PARNELL did say the activities used to achieve the mission are up to the Executive Branch. CHAIRMAN GREEN asked about the issue regarding truth in budgeting and SENATOR PARNELL responded that he had no answer for MR. BALDWIN's question regarding the constitutionality of these sections. He said he found it rather interesting and the intent was only to ensure that what the Legislature hears in December mirrors the bill they see in January. SENATOR PARNELL noted in the past those two paths have diverged, but said he is not wed to these sections. CHAIRMAN GREEN commented that she sees the intent of the bill and likes it. SENATOR WARD asked SENATOR PARNELL if he had looked at the Florida bill. SENATOR PARNELL had not but said MR. BALDWIN's description of the process of the bill whereby the Governor sets the mission statement and the Legislature follows along, seems the reverse of the Alaska Constitution and the Legislature's role of setting policy. He said to him that appears to be a top down approach. SENATOR PARNELL observed that it seemed as if the Administration was offering the Florida bill as a solution. He said when he was working on the bill initially he had asked for cooperation from a top official in the Governor's office, he had incorporated every requested change from them into a work draft that was subsequently rejected. In light of that, he plans to work within the committee process on this bill. SENATOR PARNELL said he had two small changes. SENATOR WARD moved the change from legislation to Legislature on page 2, line 12 as amendment #1. Without objection, it was so ordered. SENATOR PARNELL said page 6, lines 22-24 the words "goals and objectives" should be deleted and replaced with "missions and desired results." He said "missions and desired results" would also replace the words "goals and objectives" at the end of line 23. SENATOR WARD moved the above change as amendment #2 and without objection, it was so ordered. SENATOR WARD then made a motion to move CSSB 76(STA) from committee with individual recommendations and accompanying fiscal notes. Without objection, it was so ordered.