Arkansas Budget and Appropriation Process Bureau of Legislative Research, 2008.
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Transcript of Arkansas Budget and Appropriation Process Bureau of Legislative Research, 2008.
Arkansas Budget and Appropriation Process
Bureau of Legislative Research, 2008
The Budget Process
Preparation
Review/Revise
Authorization
Funding
THE BUDGET PROCESS
Preparation
The Preparation Phase
Budget Calendar
The State Fiscal Year Begins on July 1 and Ends on June 30.
A Biennial Period or Biennium is a two year period that usually begins July 1 of
the odd-numbered year and ends June 30 of the next odd-numbered year.
Jun Jul Sep Oct Nov Dec Jan Mar Apr May JunAug Feb
Budget Requests Prepared
ExecutiveReview
ALC/JBC Hearings
Session Convenes
JointBudget Meetings
Legislature Adjourns
OperatingBudgetsPrepared
Official RevenueForecast
Regular Session Budget Calendar
Fiscal Legislative Session • On November 4, 2008 Arkansas voters
approved a proposed constitutional amendment that becomes effective January 1, 2009 that in-part provides:
• The General Assembly shall meet every year• The General Assembly shall meet in Regular
Session on the second Monday in January• Beginning in 2010, the General Assembly shall
meet in Fiscal Session on the second Monday in February
• A bill other than an appropriation bill may be considered in a Fiscal Session if two-thirds (2/3) of the members of each house of the General Assembly approve consideration of the bill
Fiscal Legislative Session• A Regular biennial session shall not exceed sixty
(60) calendar days unless extended by a two-thirds (2/3) vote of the members of each house of the General Assembly and shall not exceed seventy-five days (75) days in duration, unless extended by a three-fourths (3/4) vote of the members of each house of the General Assembly
• A Fiscal Session shall not exceed thirty (30) calendar days in duration, except that by a vote of three-fourths (3/4) of the members of each house of the General Assembly a Fiscal Session may be extended one (1) time by no more than fifteen (15) calendar days.
• No appropriation made by the General Assembly after December 31, 2008 shall be for a longer period than one (1) fiscal year
• In making appropriations for any fiscal year the General Assembly shall first pass the General Appropriation Bill
The Preparation Phase
Budget Requests
A Budget Request - Commitment Item Format
Title Actual Budgeted Base TotalRegular Salaries $200,000 $352,000 $361,856 $486,856 No. Positions 12 16 16 22 Personal Svs Match 42,000 73,920 75,990 102,240 Operating Expenses 665,000 541,530 529,604 728,354 Conf Fee & Travel 58,776 60,000 60,000 78,000 Capital Outlay 123,241 101,000 - 300,000
Prof. Fees & Services 82,150 71,550 71,550 171,550 Advertising - - - 300,000
Total $1,171,167 $1,200,000 $1,099,000 $2,167,000
FUNDINGFund Balances $2,100,000 $1,365,833 $689,833 $689,833General Revenue 400,000 474,000 474,000 474,000 Special Revenue 37,000 50,000 61,000 61,000 Federal Funds - Total Funding $2,537,000 $1,889,833 $1,224,833 $1,224,833
The Preparation Phase
Roles In Budget Preparation
“In state budgeting, gubernatorial leadership is a dominant consideration.”(Changing State Budgeting: S. Kenneth Howard, 1973)
Roles in Budget Preparation Phase
• Set Policy for Agency Requests
• Forecast State Revenue
• Recommend Budget to ALC/JBC
• Recommend Added Revenues as Needed
Governor/DFA
Roles in Budget Preparation Phase• Consider Agency
Requests & Governor’s Recommendation
• Recommend Budgets to General Assembly
• Recommend State Employee Salary Levels
• Have Bills Prepared for Introduction
Legislative Council / Joint
Budget
83 Members
Roles in Budget Preparation Phase• Consider ALC/JBC
Recommendations • Consider Governor’s
Revisions and New Programs
• Consider Member-Sponsored Bills
• Recommend Fiscal Bills and Pay Levels to General Assembly
• Prepare Revenue Stabilization Amendment
56 Members
Joint Budget Committee
“Legislators get caught spending inordinate amounts of time trying to save relatively trifling sums.”(Changing State Budgeting: S. Kenneth Howard, 1973)
Legislature
THE BUDGET PROCESS
Authorization
AN APPROPRIATION GIVES THE AGENCY THE AUTHORITY TO SPEND MONEY IF AND WHEN IT BECOMES AVAILABLE.
=
The Authorization Phase
The Constitutional Requirements
1 Year Limit on Appropriations
Single Subject
General Appropriation Bill must "embrace nothing but appropriations for the ordinary expenses of the executive, legislative and judicial departments of the state” & be passed first
Appropriations must be in dollars and cents
Appropriations (except for education, highways, and debt of the state) must be approved by 3/4 affirmative vote
Constitutional Restrictions
The Authorization Phase
Types of Appropriation Bills
528
691
922
1163
1326
309 348 370429 475
1496
0
200
400
600
800
1000
1200
1400
1600
1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Introduced Appropriation Bills
Types of Appropriation Bills
• Regular Agency Operating Appropriation– 1-year period– Effective July 1
• Supplemental Appropriation– Effective before July 1 & usually immediately– Usually adds to an existing authority– State Funds usually come from an Accumulated
Surplus or recovered Fund Balances
• Construction– State Funds usually from General
Improvement Fund (Surplus & Interest Earnings)
• Reappropriations– Allows the Agency to spend the
balance of an appropriation provided by another General Assembly.
– Not new authority to spend– Usually for old construction projects
The Authorization Phase
Elements of an Appropriation Bill
SECTION 2. APPROPRIATION - OPERATIONS. There is hereby appropriated, to the Abstracters' Board of Examiners, to be payable from the Abstracters' Examining Board Fund, for personal services and operating expenses of the Abstracters' Board of Examiners for the 2008-09 fiscal year, the following: ITEM FISCAL YEAR NO. 2008-2009 (01) REGULAR SALARIES $ 20,193 (02) PERSONAL SERVICES MATCHING 8,264 (03) MAINT. & GEN. OPERATION (A) OPER. EXPENSE 2,567 (B) CONF. & TRAVEL 0 (C) PROF. FEES 0 (D) CAP. OUTLAY 0 (E) DATA PROC. 0 TOTAL AMOUNT APPROPRIATED $ 31,024
HOW MUCH?
FOR WHAT?
WHO? FROM WHERE?
The Authorization Phase
FROM WHERE?
The Budget Process
Funding
TOTAL STATE REVENUEFY 2008
General Revenue $ 5,618,456,330
Special Revenue 1,691,902,903
Cash Funds 3,748,891,979
Federal Funds 4,246,431,485
Trust & Other Non Revenue 2,732,221,175
TOTAL STATE REVENUE$18,037,903,873
TOTAL STATE REVENUE – 2008
$18 Billion
General Revenue
31%
Trust & Other
Non Revenue
15%
Federal
24% Cash
21%
Special
10%
Insurance2%
Income Taxes56%
Sales/ Use38%
Other1%
Luxury3%
GENERAL REVENUE - 2008$5.6 Billion
SPECIAL REVENUES - 2008 $ 1.7 Billion
Property Tax Relief14%
Finance6%
Natural Resources
3%
Highway Users37%
Game & Fish5%
Other35%
SPENDING IS LIMITED BY THE AVAILABLE APPROPRIATION OR THE AVAILABLE MONEY - WHICHEVER IS LESS!
A Program must have
both an appropriation
and a means of getting money to it.
If one or the other is
missing, the program cannot exist.
•DEDICATED SOURCE
•GENERAL IMPROVEMENT FUND
•REVENUE STABILIZATION LAW
Three Methods of Funding Available
•DEDICATED SOURCE
Three Methods of Funding Available
The Constitution says “…no moneys arising from a tax levied for one purpose shall be used for any other purpose.”
•State Dedicated Tax or Fee (Special Revenue)
•Federal Grant-in-Aid
•Cash Funds
•Trust Funds
•Non-revenue Receipts
DEDICATED SOURCES OF FUNDS
Arkansas Biosciences
Institute Program Account
Prevention and Cessation Program
Account
Tobacco Settlement Program Fund(Remainder of 2001 after Healthy Century Transfer
and remainder after Debt Service Fund Transfer Thereafter)
Medicaid Expansion Program
Account
Targeted State Needs Program Account
Healthy Century Trust Fund(First $100 Million +
Interest+ Unneeded Funds in Debt Service Fund)
Tobacco Settlement Cash Holding Fund
Tobacco Settlement Debt Service Fund
($5 million/year)
Tobacco Commission Fund
InterestInterest
InterestInterest
31.6%
22.8%
29.8
15.8
Interest
UAMS Biosciences $2.2 M
ASU Biosciences $1.8 M
School of Public Health $1 M
33% School of Public Health
22% Delta AHEC
22% Center on Aging;
23% Minority Health Initiative
•DEDICATED SOURCE
Three Methods of Funding Available
•GENERAL IMPROVEMENT FUND
$-
$100.0
$200.0
$300.0
$400.0
$500.0
Mill
ions
1991-93
1993-95
1995-97
1997-99
1999-01
2001-03
2003-05
2005-07
2007-09
General Improvement FundIncome and Authorized Funding
IncomeAuthorized Funding
•DEDICATED SOURCE
•GENERAL IMPROVEMENT FUND
Three Methods of Funding Available
•REVENUE STABILIZATION LAW
ACT 311 of 1945
The Revenue Stabilization
Law
Revenue Stabilization Law
Revenue Flow
The Budget Process
Review/Revise
“...since the practice of review and advice violates the separation of powers doctrine, [it] is unconstitutional.”
CHAFFIN v. ARK. GAME & FISH COMM'N, 296 Ark. 431 (1988)
CAUTION!!!
•Contracts
•Methods of Finance
•LeasesREVIEW
•Budget Adjustments
•Misc. Federal Grants
•Interagency Contracts
Legislative Council SubCommittees
PEER
RULES & REGULATIONS
•Special Entry Rates
•Titles & Grade Changes
•Personnel Policy Changes
•Pay Plan
Rules & Regulations
PERSONNEL
LITIGATION
•Approved Claims Against the State
•Appealed Claims
•Lawsuits Against the State•Out-of-Court Settlements
CLAIMS REVIEW
CHARITABLE, PENAL & CORRECTIONAL INSTITUTIONS
•Correctional Institutions•Other State Institutions•Purchased Institutional Services
The Budget Process
Preparation
Review/Revise
Authorization
Funding
Arkansas Budget and Appropriation Process
Bureau of Legislative Research, 2008