Chapman Rackaway: Two-year budgets go against the tide

12/21/2012 5:13 PM

12/21/2012 5:13 PM

Gov. Sam Brownback has established a policy agenda that tries to remake Kansas in the model of Texas. As Kansas’ march southward continues apace, the governor has decided to take another perplexing path down the road to Austin.

Starting in January, the governor plans on submitting two-year budgets to the Legislature.

Texas is one of just 19 states, according to the National Conference of State Legislatures, that writes its budgets for two years at a time. The arrangement makes good sense since the Texas Legislature meets only once every two years. Budgets should link up with legislative sessions. Kansas used to have biennial budgeting as well – when the Legislature met only every second year. But starting in the 1950s, budgets changed to mirror an annual basis.

Kansas was one of many swimming in the same tide as we moved from more sporadic legislating to yearly meetings. In 1940, 44 states had two-year budgets. But most state legislatures at the time met every two years. Some only met every four years.

But legislatures became professionalized, their duties expanded, and their budgets swelled accordingly. Now that the number of biennial budgeters has dwindled to 19, a strong trend toward annual budgeting has emerged for state general funds. Only Connecticut and Arizona have moved from annual to biennial budgets over the past 20 years, and both were mostly for reasons of partisan politics.

In the past two decades, both former Kansas House Speaker Robin Jennison and former Senate President Dave Kerr have proposed biennial budgeting, but neither proposal went to the governor’s desk. Now that the governor is behind it, the two-year budget process has a champion with the capacity to make this change.

Brownback’s reasons for moving to the two-year budgeting cycle are murky. Though the governor’s stated reason is to allow the year when no budget is written for oversight, evidence from Maine suggests that a biennial budget plan is far from a time-saver. A 2010 editorial in the Brunswick Times-Record excoriated the state’s two-year budget process: “Executive departments spend endless hours charting spending over two years (really almost three, from the start of planning), and rarely find numbers that stick. The Legislature spends many more hours trying to make the document work, and instead ends up crafting multiple supplemental budgets to fix the first one.”

Making matters worse, the NCSL report refers to a 2011 study finding that biennial budgeting states’ revenue estimate errors averaged 2.18 percent. Annual budgeting states’ estimate errors were less than half that rate.

There is an existing model in Kansas for biennial budgets, though: Fee-funded agencies and transportation already have multiyear budgets. And a possible clue to the reason for biennial budgeting lies in those fee-funded agencies. Annual budgeting gained momentum in the states as they shifted toward sales and income taxes and away from property taxes. With income taxes dropping significantly, the two-year budget idea may simply be to accommodate a mostly fee- and sales tax-driven state revenue stream in the future.

Despite the many concerns over a biennial budget and its disconnect from the legislative process as designed in Kansas, its support among education constituents means it likely will sail through a Legislature eager to show its fealty to the governor.

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