NCA Government Affairs The Budget Process In The States NCA Government Affairs

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Budget Guidelines for Agencies July – August To begin the annual budget process the Governor may ask all agencies to submit their budget requests for the coming year. Appropriation Request Instructions may be based on: Revenue Estimates (Projected Shortfalls or Surpluses) Inflation / Medical Inflation Market Performance (Retirement Plans) Governor’s Policy Initiatives / Priorities Tips: Make your cause one of the Governor’s Priorities or Initiatives. Insulate yourself from potential cuts.

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Agency Requests Submitted Sept. – Oct. Agencies must submit their budget requests in adherence with the Governor’s Instructions. Agencies are experienced in manipulating these requests to protect their own budgets / interests. Propose cuts to items they know are likely to be restored. Often times there is a mechanism for agencies to request “improvements” outside of the Governor’s recommendations. Tips: Meet with Partner Agencies prior to the submission of their request. Explore options to obtain funding, pursue increases, insulate from cuts identify inefficiencies etc. Be mindful of their situation and responsibilities, but strive to be a part of the solution

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Agency Requests Reviewed by Gov. and Executive Hearings Held Sept. - Nov. Governor’s Budget Office receives and reviews agency requests Checks to see that they adhere to the Governor’s Instructions; Evaluates Programs and Reviews Performance Measurers; Executive Budget Hearings are held with all agencies to review their requests. (typically closed to the public.) Tips: Get to know the staff (analysts) in the Budget Office that are responsible for the accounts that affect your organization. Make yourself available to these staff for any questions they may have. Work directly with Governor’s policy advisors at this stage. They will guide the budget office in the direction the Governor Desires.

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Governor Finalizes Budget and Submits to the Legislature Nov. – Jan. In the months leading up to the start of the Legislative Session the Governor will finalize the budget proposal. This is often the most secretive part of the process. Few will know what is in the Governor’s budget until it is unveiled and presented to the legislature. It is often being written and rewritten right up until the last minute. The budget is generally unveiled and handed over to the Legislature at the Governor’s State of the State Address. Tips: Be sure to make yourself available to the Governor’s budget and Policy staff to answer any questions they may have during final preparation. Be sure that the staff have any one-pagers that might help them make your case to their boss. When the bill is made public, know where to look for your priorities and understand what the bill says / does.

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Legislature Works on Budget Bill Jan. - May The Legislature takes the Governor’s proposed budget, dissects it and puts it back together. The Appropriations Committees will typically hold budget hearings with the executive agencies much like the Governor did, but these meetings are open to the public. A lot of work is done behind the scenes at the staff level. Tips: Understand the Legislative Structure, Process and Lingo Know who the key players are in budget development (Committee Chairs, Sub Committee Chairs, Senior Members, Members in favor with the Chair.) Know whose support can help you and whose might hurt you. Know the Committee staffers / analysts that work on the budget and make yourself available to them for questions. Be extra nice and understanding with staff.

State Budget Cycle Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Guidelines Sent to Agencies Agency Requests Submitted to Governor Agency Requests Reviewed by Budget Office and Agency Hearings Held Governor Finalizes Budget Recommendations Governor Submits Budget to Legislature Agency Hearings Held by the Legislature Legislature Adopts Budget

Legislature Adopts Budget Bill Mar. - June After holding hearings, considering legislation adopted, identifying priorities, and working out differences between the two houses the legislature will adopt a final version of the Budget Bill. The bill then goes to the Governor for approval or rejection. Most Governor’s have some sort of veto power. All Legislatures have a process for overriding vetoes. Tips: Never Assume your funding is save until it is in your hand. It can be vetoed, it can expire, or it can be expired. If you secured an appropriation from the legislature, lay the groundwork in the Governor’s Office to “veto proof” your funds. If successful, express appropriate appreciation and offer recognition for everyone involved.

Budgeting Outside the Lines All Year While appropriators do their best to perfect the budget on their first try, this is impossible for a number of reasons. Revenue Estimates miss their mark, Market Forces change the economic landscape, Natural Disasters happen etc. There is a process for adjusting budgets mid-year. Legislatures will often adopt “supplemental appropriations” bills to adjust the budget. These bills can adjust appropriations up or down. The Governor may have the authority to implement hiring freezes, spending reductions or mid-year cuts. Tips: Learn these different “tools” available to the Governor and Legislators in your state. Once you understand them, you might start to recognize opportunities to take advantage of them.

Differences from State to State All Year Almost all states operate on a State Fiscal Year that Runs from July 1- June 30. NY in April; TX in Sept.; and AL, MI, and DC start in Oct. 30 states operate on an annual budget cycle while 20 are on a biennial budget cycle. Most states on a biennial cycle report having a robust system of using supplementals to adjust the budget annually Of the states on a biennial budget cycle, 17 adopt their budgets in odd calendar years while KY, VA and WY do it in even years. Economic Factors, Political Forces, Size and Scale

Conclusion Additional Resources Budgeting is a year-round process. You can be a part of that process in some form at every step. Learn the Process and the Players and get in on the Game. Your own State Legislature’s Website The National Conference of State Legislatures www.NCSL.org The National Association of State Budget Offices www.NASBO.org http://www.nasbo.org/publications-data/budget-processes-in- the-states Additional Resources

Contact Information Denise Edwards NCA Director of Government Affairs dedwards@nca-online.org or 202-548-0090 ext. 103 Will Laird NCA State Government Affairs Officer wlaird@nca-online.org or 202-548-0090 ext. 119