The Case for a Two-Year Budget

June 27, 1994

In this year's governor's race, a constant theme has been the need to re-shape government and make it much more efficient. A simple procedural step already endorsed by some of the candidates, such as Bill Shepard and Helen Bentley, could make a big difference: shifting from a one-year to a two-year budget cycle.

Right now, formulating and defending an agency's budget is nearly a full-time job. Top managers get little time to run their departments: they're forced to put on their green eyeshades and play budgeteer too often.

First there are the preliminary budget requests that go to the governor's fiscal aides; then there is the back-and-forth that consumes everyone's attention up until the governor's final budget decisions; then it's the legislature's turn to tear the budget apart, including two months of constant hearings on incredible minutia before the new budget is approved after enormous wrangling -- just in time for a new round of preliminary agency requests in preparation for the next cycle.

Is this any way to run a $13 billion-a-year government?

Not any longer. This system makes long-range planning and good management nearly impossible. There is no time for managers to work the kinks out of a new program or develop cost-saving efficiencies over a few years. The focus is on immediate results to show to the governor and legislature. In turn, legislators are so inundated with thousands of pages of numerical detail that there is no way for them to assess the true worth of a program. The result is that staff recommendations for nitpicking cuts (reduce travel allotments by $1,000; disapprove that clerical position) become the main focus of debate.

How much better it would be to let the governor submit a two-year budget (with slight adjustments allowed in the off-budget year). This would create the time for managers to actually manage and for legislators to conduct on-going studies of government agencies. Discussions would shift from travel allotments to what's working and what's not in an agency -- at least in the off-budget year. What an improvement that would be in Annapolis. Think of it: a state government that is actually given a chance to govern.

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