Indiana Senate President Pro Tempore Robert D. Garton isn't worried about enacting a state budget this year. It's not that Garton, a veteran Republican legislator, doesn't care about state spending. Certainly he does. It's just that this year, Indiana isn't going to pass a budget.
The Hoosier State's Treasury is not on automatic pilot. Instead, Indiana is one of 21 states that prepare their budgets every two years. And if some key Republicans-and even some Democrats-in the House and Senate have their way, the federal government will do the same.
Legislation calling for federal biennial budgeting is one of those evergreens that Senate Budget Committee Chairman Pete V. Domenici, R-N.M., introduces in every Congress. In the past, the bill has just languished. Passage isn't exactly imminent this year, but the political dynamics are looking increasingly favorable.
The proposal's popularity stems from the fact that members on both sides of the Capitol are thoroughly disgusted with the current budget process. In the Senate, the two-year budgeting bill is awaiting floor action. And in the House, approximately 245 members, including some key appropriators, last year co-sponsored a resolution endorsing the idea.
House Rules Committee Chairman David Dreier, R-Calif., recently said that the "stars are beginning to align" behind the concept. "Biennial budgeting has very broad support in both parties because it makes sense," Dreier said.
Indeed. President Clinton and House Speaker J. Dennis Hastert, R-Ill., have both endorsed the idea. "I recommend that this happen," Hastert testified before Dreier's panel on Feb. 16. "The current budget process doesn't work well, and we need to fix it." He argued that two-year budgeting would "free up more time on the calendar for thorough consideration of authorizing measures," which provide a means for congressional oversight of federal programs.
Congressional proponents and opponents alike point to the states as evidence that two-year budgeting works-or does not work. Rep. William P. "Bill" Luther, D-Minn., a 20-year veteran of Minnesota's Legislature, which uses the practice, is a supporter. "Budgeting for two years is a more efficient and more thoughtful process for everyone involved," he said.
On the other hand, House Appropriations Committee ranking member David R. Obey, D-Wis., likes to note that in the 1940s, 44 states had biennial budgeting, compared with 21 now. And the states that pass budgets every two years tend to be small, he noted. "Most of the states that have biennial budgets have populations smaller than the 4 million people on the federal payroll," Obey said.
The way Obey sees it, "the healthiest thing that happens in this town is the annual budget review." He said the ability of the Appropriations Committees to drag in executive branch officials every year and threaten their funding gives Congress tremendous power. The executive branch is "on a very short leash," he asserted. "It is the length of that leash that determines the balance of power in this government, and this proposal would significantly lengthen that leash."
The states' experience delivers a mixed message to Congress. Some small states have biennial budgets because their legislatures meet every two years. In those states, governors generally have tighter control on spending. "As legislatures have asserted themselves, they've become more-equal partners with their governors" and have moved away from two-year budgeting, said Ronald K. Snell, the director of the economic and fiscal division of the National Conference of State Legislatures.
Of the large states, only Texas and Ohio have two-year budgets. According to Tim Keen, assistant director of Ohio's Office of Budget and Management, the process has worked very well. Ohio has something of a hybrid biennial budget: During one year, the Legislature considers a two-year operating budget covering program costs, and during the next year, a two-year capital budget covering construction and other infrastructure projects.
Keen said that crafting the operating budget every other year allows the budget office to handle its oversight role more effectively-an argument made by many congressional proponents. "From the budget-office standpoint, that's the case," Keen said. Otherwise, "you'd be doing nonstop budget preparation." And from the legislative standpoint, "clearly, it allows them the opportunity to discuss nonbudgetary issues."
Meanwhile, Garton said he is pleased with the way the two-year budget system has worked in Indiana, where the General Assembly made the change in 1970. "It was one of the best decisions we made," he said. The budget year coincides with a long session of the Legislature; in off-budget years, the session is shorter. Nonbudget years allow for better planning, Garton said. "It gives you the chance to review what you do, without the pressure of doing something new. The pressures of an annual budget mean we would be in session longer."
Mark Brown, Indiana's deputy budget director, said that two-year budgeting allows policy-makers to think big. "It does force you to take a little bit longer view of the world," he said. "Anything you can do to take a longer view is an advantage. Is there a trade-off in a little bit less flexibility during the second year? Sure."
In the off years, Ohio and Indiana routinely must approve "supplemental" budget bills to deal with new or unforeseen issues that have arisen. But Garton pointed out that this does not take as much time as passing a full-blown budget. In general, biennial states craft supplemental budgets during times of economic change, according to Snell. If a surplus is large, states might open their budgets to adjust spending, and if deficits are large, they might cut, he said.
For their part, officials in several states with one-year budgeting, including Illinois and Michigan, have few complaints about the process. Ellen Feldhausen, the director of budget operations for Illinois, noted that state legislators occasionally bundle appropriations bills at the end of the year into one large package, as Congress has done in recent years. Kelly Chesney, spokeswoman for Michigan's Department of Management and Budget, noted that the state's Legislature provides public school aid and a capital budget on a biennial basis to allow more long-term planning.
So the message from the states could be considered mixed. The federal government differs tremendously from state governments, making it difficult to use the states as examples. On the other hand, officials in two-year budgeting states do say the process promotes greater oversight of programs-a primary goal of congressional proponents.
"There is little evidence of clear advantages of either annual or biennial budgeting practices," Snell concluded in an NCSL report in 1997. He noted that legislators in biennial budgeting states say they're able to conduct more long-term planning and evaluation, and that the process is less expensive and shorter than one-year budgeting. At the same time, he said, legislators may become less familiar with the budget if it is written every two years.
In any event, Snell added, "State experience isn't necessarily the guide for the federal experience." He said that states may be under more pressure to respond to annual budget developments because of a political desire or a constitutional requirement for a balanced budget.
Thus the debate will continue on Capitol Hill, with each side trying to use the states' experiences to its advantage. In the end, Congress may run out of time to make such a huge change this year-particularly with powerful opponents in the Senate, where mischief is always a threat.
But whatever decisions the House and Senate make, they had better hope that Obey's prediction does not come true. Discussing two-year budgeting at the House Rules Committee recently, Obey quoted his favorite philosopher, Archy the Cockroach, a creation of New York Sun columnist Don Marquis in the 1920s: "Did you ever notice that when a politician gets an idea, he gets it all wrong?"
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