The Budget Process

Statewide budget development begins with reviewing and understanding the priorities outlined by the governor. In building the budget, OSBM does the following:

Estimates the continuation budget requirements. The continuation budget outlines the cost of providing the same level of service in future years as was provided in the current budget year. Continuation budget allowances include covering public school and higher education enrollment increases, entitlement increases (mainly Medicaid), debt service, and inflation on mandatory expenses (gasoline, heating oil, electricity).

Recommends expansion budget items. Expansion budget items focus on the priorities outlined by the Governor and may include funds to establish new programs or continue phase-in of programs initiated in a previous fiscal year, enhance compensation or other employee benefits, make major one-time equipment and information technology purchases, and replace lost federal funds.

Develops revenue projections and compare them to expenditure requirements. OSBM makes annual revenue projections based on current tax law. Methodologies for analysis include employment data, personal income and retail sales estimates, housing starts, and energy costs. OSBM compares base revenue projections to anticipated expenditure requirements.

Recommends a Balanced Budget. By analyzing needs and available resources, OSBM assists the Governor’s in recommending a structurally-balanced budget to the General Assembly. If initial expenditure requirements are greater than base revenue projections, OSBM works with the Governor and state agencies to identify budget reductions or revenue enhancements. The recommended budget is presented in both summary and very detailed releases.

State Budget Execution

As director of the budget, the governor is responsible for administering the budget as enacted by the General Assembly. The governor has delegated the authority to perform certain powers and duties of his role as director of the budget to OSBM.

Budget execution is accomplished through Budget Revisions. After OSBM certifies the legislatively enacted budget, OSBM and agencies adjust the budget for changes that have occurred during the development of the budget and changes authorized by the General Assembly. OSBM revises both the authorized and certified budgets using its statutory authority and/or acting on behalf of the governor under the governor’s constitutional role and authority as director of the budget. The office monitors and considers requests to make budget adjustments within the framework of the State Budget Act, other relevant state and federal legislation, and rules and policies. OSBM provides technical assistance and guidance to state agencies in budget execution.

State Budget Cycle

Steps in State Budget Process Biennial Budget
2015-17 Example
Annual Update
2016-17 Example
Instructions to agencies for submitting requests June - August 2014 January 2016
Development / submission of agency requests August - October 2014 January - March 2016
Preparation of governor’s recommended budget November 2010 - January 2015 March - April 2016
Release of governor’s recommended budget February 2015 May 2016
Legislative review and passage of final state budget February - July 2015 May - July 2016

Budget Cycle Process (PDF)