Week 3: Budget Processes: Federal and California Federal Budget Process California Budget Process State Process: the players; roles and rewards The politics of budgeting for positions LAO cases Guest Speaker -- Cheryl Stewart Assistant Program Budget Manager, Department of Finance (formerly with Leg Analyst, Corrections) Preview week 4

Key Features of Federal Process Centrality of entitlements Focus on deficit control Budget resolution v President’s Budget competing frameworks for priorities, spending Multiple sets of congressional committees Budget committees Revenue committees Authorizing committees (like policy committees) Appropriations committees (13 separate bills)

Federal Process: Actors and Timelines Office of Management and Budget (OMB) Executive agencies Congressional committees Congressional Budget Office (CBO) Timeline (about 18 months) Initial preparation: March - June Agency budget development: June - Sept President’s budget development: Oct - Feb Congressional Budget Resolution - April Congressional review and appropriations - May-Sept Fiscal year begins October 1

Key Features of State Process Focus on agency programs and policy One committee in each house Senate Budget and Fiscal Review Assembly Budget Appropriations committees no budget bill role One budget bill per house; one process Trailer Bills Governor’s Budget sets agenda for budget hearings LAO gives item by item analysis (not done by CBO)

State Legislature -- Budget Subcommittees Assembly Health and Human Services Education Resources State Administration Information Technology / Transportation Senate Education Resources Health General Government Energy

State Budget Process: Actors and Timeline Department of Finance (equivalent of federal OMB) Executive agencies Senate and Assembly budget committees/subcomm. Legislative Analyst’s Office (equivalent of federal CBO) Timeline (about 12 months) Initial preparation: July-August Agency budget development (BCPs): Sept - Dec Governor’s Budget Presented: January 10 LAO Analysis published: mid-February Budget subcommittee hearings: February - May May Revise Conference Committee/”Big Five”: June Constitutional Deadline for Legislature: June 15 Start of fiscal year: July 1

State Budget Process: Roles and Rewards Governor reserve/flexibility control costs but retain agency support political statement/leadership State Agencies gain DOF support for programs gain DOF trust for reliable budget information from adversary with DOF to loyalty to Gov. Budget political v civil servant

State Budget Process: Roles and Rewards (cont) Department of Finance (DOF) keep costs down avoid appeals from agencies successfully defend Governor’s Budget, once released Legislative Analyst’s Office (LAO) frame budget discussions recommend budget reductions preserve non-partisan reputation/accurate analysis gain Legislative approval for recommendations (secondary)

The Politics of Budgeting for Positions Position budgeting good workload measure; analytical tool; control limits flexibility for managers; can be manipulated Position v dollar budgeting Premium on positions: generate ongoing $$, increases Salary savings Position “games” by agencies: to generate savings by DOF: cut the size of state bureaucracy

Legislative Analyst Examples Technical issues (Rehab) Workload justification (DHS) Policy issue (ARB, DHS) Program redesign (CSU) Other recommend more information be provided

Preview of Week 4 Kettl -- excellent and very readable Wildavsky -- classic but harder to read Think about “rationality” Remember email Need to decide on department or unit for class assignments