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