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Budget Basics: The Budget Process

 

The budget is central to state government and a reflection of our priorities as a state. It determines how we will spend our money and which agencies, special interests and groups of citizens will benefit. In fact, the General Appropriations bill is only piece of legislation that is constitutionally mandated to pass. But how does the budget actually get written?

1. Issuing the Budget Instructions: The spring before the legislative session, the Legislative Budget Board (LBB) and the Governor's Office of Budget, Planning and Policy(GOBPP) issue instructions to state agencies, state courts and public higher education institution, telling them how much money they are allowed to request in developing their budgets. The budget instructions set the baseline for the state budget.

This year's budget instructions state that agencies can request no more than the amount they received during the 2010-2011 biennium. This biennium, however, agencies have already had to cut their budgets by 5%, due to an unexpected decline in state revenue. This year's budget instructions also tell agencies to provide a supplemental budget that outlines how they would cut their budgets by an additional 10%.

2. Submitting LARs: Over the summer, agencies use the budget instructions to develop their budget requests, or Legislative Appropriation Request (LAR). Agencies must submit their LARs to the LBB and the GOBPP by early August. You can click here to view the agency submission deadlines.

3. LAR Hearings: After agencies have submitted their LARs, the LBB and GOBPP hold public hearings to discuss the agency's proposal.

LAR hearings are a vital part of the budget writing process and one of the few opportunities that the public has to submit public input. Texas Impact will keep you up-to-date on how you can make sure that your voice is heard.

4. Drafting the General Appropriations Bill: The fall before session starts, the LBB prepares a draft appropriations bill, which is filed in both the House and the Senate, and is passed like any other bill.

5. Comptroller Certification: After the appropriations bill has been passed, the Comptroller must certify that there will be enough revenue to cover all the appropriations.

This extra step is necessary because the Texas Constitution mandates that the state budget must be balance. The legislature is not allowed to appropriate more money than the estimated amount of revenue.

6. Signing and Implementation: Once the comptroller has certified that there will be enough revenue, the bill goes to the Governor's office to be signed.

The Governor may use a line-item veto to change certain aspects of the budget. If it is still in session, the legislature may override the veto with a two-thirds majority vote in each house.

7. Implementation: The appropriations bill goes into effect on September 1 of odd-numbered years and is implemented over the following two years.

 

See all State Budget post.