1. Confidential & Proprietary Internal Kaplan Use Only. THE BUDGET PROCESS All Jurisdictions

2. Confidential & Proprietary Internal Kaplan Use Only. You will become familiar with the factors that constrain legislative deliberations no the budget. You will also cover the steps to final budget adoption across all jurisdictions IN THIS PRESENTATION…

3. Confidential & Proprietary Internal Kaplan Use Only. Economic & Political Environment -Whether there is sufficient revenue to achieve all of the strategic initiatives, or whether program cuts must be pursued -The degree to which program cuts, or alternatively, increased taxes would affect the political climate Previous Decisions -Prior legislative decisions that have long term budget effects can constrain budget deliberations -Entitlement Payments – Payments must be made to qualified recipients -Long term capital projects such as multi-year construction and or infrastructure projects FACTORS CONSTRAINING BUDGET DELIBERATIONS

4. Confidential & Proprietary Internal Kaplan Use Only. Committee Action Hearings Strategies Fiscal Notes Committee Adoption Overall Legislative Approval Chief Executive Action on the Budget Item Veto BUDGET ADOPTION

5. Confidential & Proprietary Internal Kaplan Use Only. Multiple committees are often used to hear and report on various aspects of a government budget -Education, Recreation, Environment -Taxing and Revenue -Spending and Appropriations -Appropriations may be handled collectively or at a sub-committee level -The dilution of the appropriations determination to various levels can result in interagency conflicts COMMITTEE ACTION

6. Confidential & Proprietary Internal Kaplan Use Only. Budget hearings are held to enable the subordinate units or departments to justify their budgets -Although a Chief Executive and the Legislative Body may provide guidance in strategic initiatives, not all subordinate units may fully subscribe to those agendas -The jurisdiction’s budget committee generally makes an overall presentation of the fiscal ramifications of budget adoption providing the legislature a view of the budget relative to their policy direction HEARINGS

7. Confidential & Proprietary Internal Kaplan Use Only. Some strategies for gaining budgetary approval are: -Initiating a program that has minor revenue needs in the initial stages but will grow and require more substantial funding in out years (recall the impact of prior decisions on budgets) -Building capital projects in strategically located area -Large government building projects generate revenue in a local economy. -If a voting committee or legislative member is tied to a local economy, the likelihood of approval increases STRATEGIES

8. Confidential & Proprietary Internal Kaplan Use Only. Developed for draft budget legislation moving out of committee -Fiscal notes include: -Current and future costs -Legislative purpose -Funding sources -Intergovernmental impacts FISCAL NOTES

9. Confidential & Proprietary Internal Kaplan Use Only. The committees gather all of the information that has been presented at the subcommittee level and drafts comprehensive budget legislation -If favorable, initial committee legislation is highly influential in final budget making decisions COMMITTEE ADOPTION

10. Confidential & Proprietary Internal Kaplan Use Only. OVERALL LEGISLATIVE APPROVAL At the federal and local level, both chambers of the legislature hear and report on budget legislation via Budget Committees -A conference committee comprising members of both budget committees is used to revise the budget bill so that it is consistent between the two chambers when passed -At the local level, a single Budget Committee comprising members of the legislative body hear and vet budget related matters prior to forwarding them to the full legislative body

11. Confidential & Proprietary Internal Kaplan Use Only. Once the legislature has passed a budget bill it goes to the Chief Executive for approval. -If a budget cannot be agreed on between the two chambers and passed, expenditure activity ceases in the jurisdiction -For example, in 1995, the failure of the House and President Clinton to pass a continuing budget resolution to apportion temporary funds forced a closure of most non-essential United States government offices for several weeks CHIEF EXECUTIVE ACTION ON THE BUDGET

12. Confidential & Proprietary Internal Kaplan Use Only. Item Veto provides the Chief Executive with the power to nullify or cancel specific provisions of the budget bill without vetoing the entire legislative package. -The line-item vetoes are usually subject to the possibility of legislative override (2/3 vote) -Item Veto has three uses by allowing the Chief Executive to: 1.Limit total expenditures 2.Eliminate projects or programs (limit pork barrel spending) 3.Veto items for partisan purposes ITEM VETO

13. Confidential & Proprietary Internal Kaplan Use Only. Pork barrel is a term that refers to government spending for local projects that are approved in order to bring money to a representative’s district (recall the strategies utilized to obtain budgetary approval mentioned earlier in this presentation) -The term pork barrel politics usually refers to spending that is intended to benefit the constituents of a politician in return for political support -The term was first used in an 1863 story “The Children of the Public” by Edward Everett Hale to described any form of public spending to the citizenry. Below is a link to the story -http://www.online-literature.com/edward-hale/man-without-a- country/8/http://www.online-literature.com/edward-hale/man-without-a- country/8/ Pork TRIVIA ON “PORK BARREL” SPENDING

14. Confidential & Proprietary Internal Kaplan Use Only. The checks and balances system of U.S. government provides both the executive and the legislative branches abilities to limit the powers of the other. Common Methods of Legislative Oversight -Operational Inquiries -Threat of Legislative Investigations -Establishing legislative intent (i.e. clearly drafting legislation that limits executive power) LEGISLATIVE OVERSIGHT

15. Confidential & Proprietary Internal Kaplan Use Only. Sunset Legislation & Zero Based Budgeting Information & Analysis Legislative Veto OTHER METHODS OF LEGISLATIVE OVERSIGHT

16. Confidential & Proprietary Internal Kaplan Use Only. Sunset legislation is legislation that contains a provision that terminates or repeals the law after specific date unless further legislative action is taken to extend it Combined with a Zero Based Budget, a legislated program would be required to present its achievements and projected consequences if the program is not extended. SUNSET LEGISLATION & ZERO BASED BUDGETING

17. Confidential & Proprietary Internal Kaplan Use Only. Program analysis is also used to evaluate the results of a program -While used increasingly in budget oversight, controversy has arisen as to what entity within a jurisdiction should perform the analysis -Should the analysis be performed by the agency with responsibility for the program, or should the analysis be done by an objective internal or external party? INFORMATION & ANALYSIS

18. Confidential & Proprietary Internal Kaplan Use Only. Legislative veto is the ability of a legislature to veto proposed executive actions. -An example of a legislative veto in the course assignment scenario would be that if the Cryonic Regulatory and Advisory Commission (CRAC) were an executive agency, the enabling act (the Cryonic Burial Act) would grant regulatory authority to the agency, but CRAC must obtain first obtain the legislature’s approval prior to implementing any regulations LEGISLATIVE VETO

19. Confidential & Proprietary Internal Kaplan Use Only. In this presentation, you learned about the factors that constrain the legislature in adoption of a budget You have also seen the legislative process that is generally utilized in all jurisdictions when attempting to adopt a budget Finally, you’ve seen how the Chief Executive and the Legislature both have abilities within the checks and balances of government to limit the power of the other and thereby affect the passage of a budget SUMMARY