1. Arkansas Budget and Appropriation Process Bureau of Legislative Research, 2008

2. The Budget Process Preparation Review/Revise Authorization Funding

3. THE BUDGET PROCESS Preparation

4. The Preparation Phase Budget Calendar

5. The State Fiscal Year Begins on July 1 and Ends on June 30. A Biennial Period or Biennium is a two year period that usually begins July 1 of the odd- numbered year and ends June 30 of the next odd-numbered year.

6. JunJulSepOctNovDecJanMarAprMayJunAugFeb Budget Requests Prepared ExecutiveReviewALC/JBCHearings Session Convenes JointBudget Meetings Legislature Adjourns OperatingBudgets Prepared Official RevenueForecast Regular Session Budget Calendar

7. Fiscal Legislative Session On November 4, 2008 Arkansas voters approved a proposed constitutional amendment that becomes effective January 1, 2009 that in-part provides: The General Assembly shall meet every year The General Assembly shall meet in Regular Session on the second Monday in January Beginning in 2010, the General Assembly shall meet in Fiscal Session on the second Monday in February A bill other than an appropriation bill may be considered in a Fiscal Session if two-thirds (2/3) of the members of each house of the General Assembly approve consideration of the bill

8. Fiscal Legislative Session A Regular biennial session shall not exceed sixty (60) calendar days unless extended by a two-thirds (2/3) vote of the members of each house of the General Assembly and shall not exceed seventy-five days (75) days in duration, unless extended by a three-fourths (3/4) vote of the members of each house of the General Assembly A Fiscal Session shall not exceed thirty (30) calendar days in duration, except that by a vote of three-fourths (3/4) of the members of each house of the General Assembly a Fiscal Session may be extended one (1) time by no more than fifteen (15) calendar days. No appropriation made by the General Assembly after December 31, 2008 shall be for a longer period than one (1) fiscal year In making appropriations for any fiscal year the General Assembly shall first pass the General Appropriation Bill

9. The Preparation Phase Budget Requests

10. A Budget Request - Commitment Item Format

11. The Preparation Phase Roles In Budget Preparation

12. “In state budgeting, gubernatorial leadership is a dominant consideration.” (Changing State Budgeting: S. Kenneth Howard, 1973)

13. Roles in Budget Preparation Phase Set Policy for Agency Requests Forecast State Revenue Recommend Budget to ALC/JBC Recommend Added Revenues as Needed Governor/DFA

14. Roles in Budget Preparation Phase Consider Agency Requests & Governor’s Recommendation Recommend Budgets to General Assembly Recommend State Employee Salary Levels Have Bills Prepared for Introduction Legislative Council / Joint Budget 83 Members

15. Roles in Budget Preparation Phase Consider ALC/JBC Recommendations Consider Governor’s Revisions and New Programs Consider Member- Sponsored Bills Recommend Fiscal Bills and Pay Levels to General Assembly Prepare Revenue Stabilization Amendment 56 Members Joint Budget Committee

16. “Legislators get caught spending inordinate amounts of time trying to save relatively trifling sums.” (Changing State Budgeting: S. Kenneth Howard, 1973) Legislature

17. THE BUDGET PROCESS Authorization

18. AN APPROPRIATION GIVES THE AGENCY THE AUTHORITY TO SPEND MONEY IF AND WHEN IT BECOMES AVAILABLE.

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20. The Authorization Phase The Constitutional Requirements

21.  1 Year Limit on Appropriations  Single Subject  General Appropriation Bill must "embrace nothing but appropriations for the ordinary expenses of the executive, legislative and judicial departments of the state” & be passed first  Appropriations must be in dollars and cents  Appropriations (except for education, highways, and debt of the state) must be approved by 3/4 affirmative vote Constitutional Restrictions

22. The Authorization Phase Types of Appropriation Bills

23. Introduced Appropriation Bills

24. Types of Appropriation Bills Regular Agency Operating Appropriation –1-year period –Effective July 1 Supplemental Appropriation –Effective before July 1 & usually immediately –Usually adds to an existing authority –State Funds usually come from an Accumulated Surplus or recovered Fund Balances

25. Construction –State Funds usually from General Improvement Fund (Surplus & Interest Earnings) Reappropriations –Allows the Agency to spend the balance of an appropriation provided by another General Assembly. –Not new authority to spend –Usually for old construction projects

26. The Authorization Phase Elements of an Appropriation Bill

27. HOW MUCH? FOR WHAT? WHO?FROM WHERE?

28. The Authorization Phase FROM WHERE?

29. The Budget Process Funding

30. TOTAL STATE REVENUE FY 2008 General Revenue$ 5,618,456,330 Special Revenue 1,691,902,903 Cash Funds 3,748,891,979 Federal Funds 4,246,431,485 Trust & Other Non Revenue 2,732,221,175 TOTAL STATE REVENUE$18,037,903,873

31. TOTAL STATE REVENUE – 2008 $18 Billion General Revenue 31% Trust & Other Non Revenue 15% Federal 24% Cash 21% Special 10%

32. GENERAL REVENUE - 2008 $5.6 Billion

33. SPECIAL REVENUES - 2008 $ 1.7 Billion

34. SPENDING IS LIMITED BY THE AVAILABLE APPROPRIATION OR THE AVAILABLE MONEY - WHICHEVER IS LESS!

35. A Program must have both an appropriation and a means of getting money to it. If one or the other is missing, the program cannot exist.

36. DEDICATED SOURCE GENERAL IMPROVEMENT FUND REVENUE STABILIZATION LAW Three Methods of Funding Available

37. DEDICATED SOURCE Three Methods of Funding Available

38. The Constitution says “…no moneys arising from a tax levied for one purpose shall be used for any other purpose.”

39. State Dedicated Tax or Fee (Special Revenue) Federal Grant-in-Aid Cash Funds Trust Funds Non-revenue Receipts DEDICATED SOURCES OF FUNDS

40. UAMS Biosciences $2.2 M ASU Biosciences $1.8 M School of Public Health $1 M 33% School of Public Health 22% Delta AHEC 22% Center on Aging; 23% Minority Health Initiative

41. DEDICATED SOURCE Three Methods of Funding Available GENERAL IMPROVEMENT FUND

44. DEDICATED SOURCE GENERAL IMPROVEMENT FUND Three Methods of Funding Available REVENUE STABILIZATION LAW

45. ACT 311 of 1945 The Revenue Stabilization Law

46. Revenue Stabilization Law Revenue Flow

47. The Budget Process Review/Revise

48. “...since the practice of review and advice violates the separation of powers doctrine, [it] is unconstitutional.” CHAFFIN v. ARK. GAME & FISH COMM'N, 296 Ark. 431 (1988) CAUTION!!!

49. Contracts Methods of Finance Leases REVIEW Budget Adjustments Misc. Federal Grants Interagency Contracts Legislative Council SubCommittees PEER

50. RULES & REGULATIONS Special Entry Rates Titles & Grade Changes Personnel Policy Changes Pay Plan Rules & Regulations PERSONNEL

51. LITIGATION Approved Claims Against the State Appealed Claims Lawsuits Against the State Out-of-Court Settlements CLAIMS REVIEW

52. CHARITABLE, PENAL & CORRECTIONAL INSTITUTIONS Correctional Institutions Other State Institutions Purchased Institutional Services

53. The Budget Process Preparation Review/Revise Authorization Funding

54. Arkansas Budget and Appropriation Process Bureau of Legislative Research, 2008