Spending Plan & Budget Proposal Development
The Executive Office for Administration and Finance (A&F) is the state agency responsible for preparing the Governor’s budget recommendations and for oversight of the annual budget enacted by the Legislature, known commonly as the General Appropriations Act or the GAA. Under state law, every state agency is required to annually prepare a budget for review and evaluation by the Secretary for A&F. The spending plan typically includes staff, expenditure and revenue estimates for the current fiscal year (2012) as well as the agency’s anticipated staffing additions or deletions, expenses and receipts for the next fiscal year (2013) based on the assumption that they will maintain the same level of services and programs from one year to the next.
In July of each year, after the GAA is signed into law by the Governor, agencies present spending plans to A&F to identify in extensive detail how funds appropriated for the current fiscal year will be spent. These spending plans reflect each agency’s plans to operate their programs and services for the current fiscal year. Agencies are also requested to reflect any changes that may be necessary to their operating budgets, whether savings or increased costs, that will result from projects and investments made through the five-year capital plan.
For FY 2012 virtually all agency operations budgets were level-funded to FY 2011, meaning that they needed to account for increased costs within their budget for such items as collectively-bargained wage increases, mileage increase and inflation in fuel and leasing costs. Agencies submitted their FY 2012 plans to A&F for review in August 2011. Spending plans were approved in September 2011 after A&F budget analysts carefully reviewed all spending and revenue projections. These approved plans then served as the base for then developing the FY 2013 budget.
FY 2013 Budget Development
In developing budget recommendations for FY 2013, agencies incorporated projected costs for the programs and services they operate, such as anticipated changes in staffing, caseload growth or increases in fixed costs such as fuel and energy costs. Agencies also take into account changes in laws, regulations and policies that will impact programs and services for the next year. Based on revenue projections and other changes that A&F projected for available budgetary resources, agencies were asked to focus on developing spending plans for FY 2013 with an emphasis on controlling or preventing growth in spending over the projected FY 2012 spending levels.
After reviewing reported agency cost in FY 2013 and consulting A&F’s long-term financial modeling of sustainable growth levels, A&F established spending parameters that would be necessary in FY 2013 to balance the state’s budget. Agencies were required to submit proposals that would ensure that total spending fell below FY 2013 reported costs. These plans were submitted to A&F and serve as the base for the Governor’s FY 2013 budget recommendations.
Throughout the fall, A&F continued to work with agencies to develop their spending proposals. Agencies were given the opportunity to review and revise the line items, make reform and re-organization proposals and other changes necessary to live within budgetary parameters and meet core requirements of state government. Following the submission of spending targets, A&F worked with each secretariat to assess the impact of reductions and identify which cuts will be most challenging for agencies to implement. A&F has sought to mitigate these reductions to the greatest extent possible.
On December 12, 2011the annual Consensus Revenue hearing was held by the administration, the Senate and the House. The three branches received testimony from the Department of Revenue and other economists regarding the amount of tax revenue that could be expected for FY 2012 and 2013. While the testimony suggested that revenues would continue to increase and that the state’s economy was recovering, the economists also warned of slowing growth in the national economy.
For the second straight year, A&F established an Inter-Secretariat Budget Team (ISBT) to identify and develop additional cost-saving proposals. The ISBT team members were selected from across the secretariats and were charged with developing innovative ideas that would help to mitigate budgetary reductions and improve how government works. This team worked with A&F throughout the FY 2013 budget process and will continue their work after the submission of the FY 2013 budget to ensure timely implementation of the approved solutions.
Fiscal Year 2013 Post-Budget Release Process
In preparation for the start of FY 2013 (July of 2012), A&F will continue to work with agencies to develop implementation plans well ahead of the beginning of the fiscal year. As part of the budget development process most agencies have successfully identified areas already where reductions to programs and services will be necessary or where they may capitalize on efficiencies. However, due to the complexity of some recommended programmatic changes, in some cases agencies have not yet been able to determine exactly how they will restructure programs to live within recommended funding levels. The implementation planning process led by A&F helps to best ensure that all necessary steps are completed by the beginning of FY 2013 to ensure that agencies will be able to operate at expected funding levels.
top of page