State Rep. Peter Cownie (R-West Des Moines) last week introduced a bill, House File 1, to require state agencies to use zero-base budgeting principles when preparing their biennial budget requests to the General Assembly.
Zero-based budgeting is a method of budgeting whereby all expenses each period must be justified. In other words, each budgeting period begins at a “zero base,” and every function and/or expense must then be analyzed for its needs and costs.
Currently, under Iowa Code section 8.23, the Executive Branch departments’ estimates of expenditure requirements are based upon 75 percent of the funding provided for the current fiscal year, adjusted by a “historical employee vacancy factor.” The remaining expenditure requirements are then prioritized by the respective programs.
Alternatively, under Iowa Code section 602.1301, the Iowa Supreme Court must submit an annual operating budget for the Judicial Branch that is based upon 100 percent of the funding provided for the previous fiscal year.
Under HF 1, there must be “sufficient supporting data and explanations to justify each expenditure as though it were a new expenditure.” The estimates are also required to include each proposed expenditure’s prioritization as it relates to all the other proposed expenditures.