1. 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

2. 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)

3. 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

4. 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)

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

6. 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

7. 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

8. 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)

9. 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

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

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