Magazine article Government Finance Review

Biennial Budgeting in Washington Cities and Counties

Magazine article Government Finance Review

Biennial Budgeting in Washington Cities and Counties

Article excerpt

Editor's note: The following article is adapted from a report published on the web site of the Municipal Research & Services Center of Washington (MRSC). The web site address of the MRSC is For more information on the MRSC, see "Web Site Highlight" on page 64 of this issue of Government Finance Review.

Early in 1997, the State of Washington Legislature authorized biennial budgeting for counties. This same option has been available to cities and towns since being authorized in 1985. This report identifies which jurisdictions are currently operating with a biennial budget and what the advantages and disadvantages are in moving to a two-year budget cycle.

Washington cities may only begin the biennial budget on an odd-numbered year, but counties have no such restriction. In fact, an even-numbered year may work better for counties, since the state's fiscal year begins six months prior to the even-numbered years. If counties begin their biennial budgets on the even-numbered years, they could then anticipate major changes in the state's policies and programs.

The definition of a biennial budget is the adoption of a two-year appropriation, with a requirement of a mid-biennium review and adoption of only adjustments to the original biennial appropriations that reflect changes in financial conditions, programs, and/or authorizing laws that affect ongoing expenditures.

The Washington cities that have been through several biennial budget cycles include Vancouver, Tacoma, Mercer Island, Kennewick, Steilacoom, Oak Harbor, and Mabton. The cities that are just now in their first biennial budget cycle include Bellevue, Redmond, Mill Creek, Federal Way, and Longview. Ten of these cities actually appropriate the full two-year budget. The two remaining cities - Oak Harbor and Federal Way - appropriate each fiscal year individually prior to the beginning of the biennium within a single budget document.

Those cities with a biennial appropriation ordinance often print budget documents that show "spending plans" for each year, which makes for easy comparisons. The cities that do not show the annual spending plans in their budgets do use them internally. During the first year of the biennium, budget monitoring and reporting is done by comparing actual expenditure to the first year's spending plan. Legally, department heads could spend their entire biennial appropriation in the first year, but the cities report that they have had no problem with departments exceeding their spending plans. In fact, several cities reported that departments are underspending because they know that they will not lose their appropriation authority at the end of the year.

The cities of Seattle, Renton, and Spokane each develop a biennial spending plan and approve separate appropriations each calendar year. This is not true biennial budgeting, but provides some longer planning horizon advantages. The cities of Marysville, Port Angeles, and Toppenish have attempted biennial budgeting and then returned to annual budgeting.

No counties in Washington have yet adopted a biennial budget. Whatcom County voters passed a charter amendment in the November 1997 election allowing biennial budgeting and the county has passed an ordinance authorizing a biennial budget beginning in 1999. In a recent survey of large counties across the country conducted by the Finance Director of the City of Renton, Washington, only two of 35, or about 6 percent, reported adopting biennial budgets.

Advantages of Biennial Budgeting

Better Long-range and Strategic Planning. A biennial budget requires forecasting expenditures and revenues up to 30 months in advance; thus departments and policymakers are considering longer time horizons for resource and program planning purposes.

Staff Redeployment Opportunities. The biennial budget offers an opportunity to redeploy the central budget staff during the first year of the biennial budget to focused program evaluations, capital improvements programming, or policy development. …

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