GOVT 2306

1. GOVT 2306 The Texas Budget

2. The slides will provide you with a few links to material related to the Texas Budget.We will then walk through the process and I’ll outline its major features.

3. The most important institution related to the Texas Budget is the Legislative Budget Board. They provide a variety of functions related to the budget.They’ll be more on this institution below, but click through to get familiar with them.

4. Click here for the link to info on the LBB in the Texas State Historical Association website.

5. Legislative Reference Library has a page with links to the major documents related to the Texas Budget, in addition to a snapshot view of the budget process.

6. The most thorough resource is this report from the Senate Research Center: Budget 101: A Guide to the Budget Process in Texas.

7. The House Research Organization has a pretty good document too: Writing the State Budget – 82nd Legislature.

8. Here are useful external sites focused on the Texas Budget: Texas Budget SourceState Budget Solutions.

9. For differing ideological takes on budgeting, click on the following: The liberal Center for Public Policy Priorities: Budget.The conservative Texas Public Policy Foundation: Budgets and Spending.

10. And here are good sources for media coverage of the Texas Budget:Texas Tribune: BudgetAustin American Statesman: State Budget.

11. And an overview of the budgeting process in the 82nd Legislature – the one that put together the 2012-2013 budget.

12. And links to all blog posts on the blog tagged with “Texas Budget.”

13. And finally, The 2012 Texas Fact Book, a document produced by the LBB compiling various facts associated with the states, some related to the budget, some not. Its a great general resource about the state.

14. Suffice to say, there’s lots of material on the Texas budget out there. If you get familiar with the material in the previous link, you’ll come close to being an expert on the process.Now let’s take a look at the budget itself.

15. First: What is a budget?

16. Simple definitions: 1. an estimate, often itemized, of expected income and expense for a given period in the future.2. a plan of operations based on such an estimate.3. an itemized allotment of funds, time, etc., for a given period.

17. Beyond that, a government’s budget contains the vision that the state has for its future. The vision begins with the governor, who establishes guidelines for what executive agencies will submit, and is adjusted by the legislature, which has to approve the budget in order for it to become binding.

18. If you control the budgeting process, you can control much of what happens in the state.

19. A quick, major clarifying point.Texas has a two year budgeting cycle. The legislature – if you recall – only meets 140 calendar days beginning the first Monday the year following each election.

20. In that period, it passes the biennial budget that is to begin the next fiscal year.

21. Here’s a quick early look at the process in the 82nd Session of the legislature:

22. The LBB’s website has a brief statement on the history of budgeting in Texas.There was no effective system of budgeting until 1949.

23. The Texas Constitution of 1876 did not establish a budgeting process, but it did put limits on the ability of the state to assume debt.

24. Article 3, Section 49 – as originally written – states: SEC. 49. No debt shall be created by or on behalf of the State, except to supply casual deficiencies of revenue, repel invasion, suppress insurrection, defend the State in war, or pay existing debt and the debt created to supply deficiencies in the revenue, shall never exceed in the aggregate at any one time two hundred thousand dollars.

25. This falls short of requiring a balanced budget, but it ensures that spending stays in line with revenues.

26. As with much of the Constitution, it has been heavily amended.One of the amendments allows for the legislature to “submit to the eligible voters of this State one or more propositions that, if approved by a majority of those voting on the question, authorize the legislature to create State debt for the purposes and subject to the limitations stated in the applicable proposition.”

27. The state of Texas can issue bonds – which create debt – for defined purposes, like building prisons, highways or water development projects.

28. 1942 the constitution was amended to mandate that the Comptroller of Public Accounts “in advance of each Regular Session of the Legislature to prepare and submit to the Governor and to the Legislature upon its convening a statement under oath showing fully the financial condition of the State Treasury at the close of the last fiscal period and an estimate of the probable receipts and disbursements for the then current fiscal year. . .

29. . . . Except in the case of emergency and imperative public necessity and with a four-fifths vote of the total membership of each House, no appropriation in excess of the cash and anticipated revenue of the funds from which such appropriation is to be made shall be valid.”

30. This states that the money appropriated for spending purposes from the treasury cannot exceed the anticipated revenue to be collected during the biennium.

31. Which establishes that the Texas budget is a pay-as-you-go state.At least for the general revenue – more on that later.

32. It also establishes that Texas must have a budget if it is to function at all. The first bills introduced in the Texas House and Senate each session are the general appropriations bills. These must pass. From the 82nd session: HB 1Enrolled version from the LBB.

33. As a consequence, the Legislative Budget Board was established to coordinate the budgeting process.This is how it describes itself:

34. The Legislative Budget Board (LBB) is a permanent joint committee of the Texas Legislature that develops budget and policy recommendations for legislative appropriations for all agencies of state government, as well as completes fiscal analyses for proposed legislation. The LBB also conducts evaluations and reviews for the purpose of identifying and recommending changes that improve the efficiency and performance of state and local operations and finances.

35. Design details: The Texas Legislative Budget Board is governed by a five person Board that is co-chaired by the Lieutenant Governor of Texas and the Speaker of the Texas House of Representatives. The Chairman of the Texas House Appropriations and Ways and Means Committees are also on the Board along with the Chairman of the Texas Senate Finance Committee. Two more House members are appointed by the Texas House Speaker while the remaining three Senate members are appointed by the Lieutenant Governor. There is an Executive Director and four Assistant Directors that oversee a 117 person staff.

36. For infoTSHATexas TribuneGTLIHouston Chronicle

37. Now a walk through the process.And some links from Texas Politics ( if they help): 1 – Planning and Proposal2 – Legislative Action3 – Review and Approval4 – Implementation and Monitoring5 – The Budget Cycle.

38. Currently (as of July 2012) the budget for the biennium beginning September 1, 2013 is being assembled.

40. The process begins when the governor develops a statewide vision for the future of Texas government. The guidelines are developed in cooperation with the Legislative Budget Board.

41. This allows the governor to establish a vision for the state.Here’s on of Governor Perry’s recent statements.Here is the request from the LBB.

42. Agencies are asked to develop long term strategic plans which state the goals of the agency and where they are in implementing those goals.

43. Notice that this is a smaller version of a more exhaustive process each agency has to undergo every 12 years when they are subject to Sunset Review.

44. Governor’s Office of Budget, Planning and Policy issues guidelines to all agencies in how to prepare their requests. Different advisors specialize on different agencies. Click here for the agency’s history. It was established in 1976 in an effort to enhance the governor’s power. He became the Chief Planning Officer of the State.

45. Governor Perry’s most recent guidelines includes a request that agencies cut an additional 10% from their budgets.Here’s the letter.

46. Governor Perry has also proposed the Texas Budget Compact.Details from the Texas Tribune.More from the Chron.Support from Empower Texas.Criticism from the AAS.

47. The LBB then sends out LegislativeAppropriation Request (LAR) instructions to all state agencies.2014-15 Legislative Appropriations Request

48. Agencies then return their requests, which are then evaluated by the Legislative Budget Board.This is done in the summer prior to the election. Here is the current submissions deadline.

49. Public hearings are then held by the Legislative Budget Board and the Governor’s Office of Budget, Planning and Policy to discuss the proposals.This is where the public has the best chance to offer input on the merit of the agencies.

50. The LBB then drafts the appropriations bills that will be filed in the House and the Senate when the next session convenes.These are the first bills filed and are designated HB1 and SB1.