Florida’s Budget Structure and Process July 20, 2007 Budget Powers in the Florida Constitution The Legislature: The budget is product of the Legislature. Florida's.

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Transcript Florida’s Budget Structure and Process July 20, 2007 Budget Powers in the Florida Constitution The Legislature: The budget is product of the Legislature. Florida's.

Florida’s Budget Structure
and Process
July 20, 2007
Budget Powers in the Florida Constitution
The Legislature: The budget is product of the Legislature.
Florida's Constitution gives the Legislature the exclusive power to
appropriate state funds (Article VII, Section 1.(c)).
The Governor: The Constitution designates the Governor as the
“... chief administrative officer of the state responsible for the
planning and budgeting of the state.” (Article IV, Section 1.(a)).
The Chief Financial Officer: The chief financial officer shall
serve as the “chief fiscal officer of the state and shall settle and
approve accounts against the state, and shall keep all state funds
and securities.” (Article IV, Section 4(c)).
Constitution Requires Balanced Budget: “Provision shall be
made by law for raising sufficient revenue to defray the expenses
of the state for each fiscal period.” (Article 7, Section 1(d)) See section
216.221 (1), Florida Statutes.
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Consensus Estimating Conference

Senate
Develop
agreed-upon
projections
for certain
revenues
and
caseload/
workload
data
Major Projections Developed
By Conferences


House


Governor

Economic &
Demographic Research


amount of General Revenue
available for appropriations
amount of Lottery funds
available for appropriations
number of children to be
enrolled in public schools
number and caseload for
Temporary Assistance to
Needy Families
amount of Public Education
Capital Outlay (PECO) funds
number of prisoners
caseload and expenditures for
Medicaid
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Fund Segregation



General Revenue - Consists of all monies received by the state not
earmarked by law for a specific purpose. The balance of funds in
the General Revenue Fund which is in excess of the amount needed
to meet General Revenue Fund appropriations for the current fiscal
year is known as the “working capital balance”.
Trust Funds - Consist of moneys received by the state which under
law or under trust agreement are segregated for a purpose
authorized by law.
Budget Stabilization Fund - Consists of monies set aside equaling
five percent of the General Revenue Fund. It is required by the
Constitution and can only be used to cover General Revenue
shortfalls and emergencies. The current balance is approximately
$1.2 billion.
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Budget Stabilization Fund
Requirements
1600
$1,375
1400
$1,354
$1,249
1200
$1,354
$1,091
$ in millions
1000
$999
$847
800
$894
$941
$959
$966
$787
600
$586
$409
400
$261
200
$121
-1
0
20
09
-0
9
20
08
-0
8
20
07
-0
7
20
06
-0
6
20
05
-0
5
04
-0
4
20
20
03
-0
3
20
02
-0
2
20
01
-0
1
20
00
-0
0
19
99
-9
9
19
98
-9
8
19
97
-9
7
96
-9
6
19
95
19
19
94
-9
5
0
Source: Budget Stabilization Fund estimates are based on the March, 2007 Revenue Estimating Conference projections.
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Primary Funding Sources
GENERAL
REVENUE


State tax revenues
available for any use
These are the
revenues that
programs compete
for and the
Legislature must
allocate between
programs
TRUST
FUNDS
Both have revenues that are  Monies that are
recurring and non-recurring
earmarked by law for
specific purposes
 Legislature has little
discretion in allocating
among programs,
unless the law is
changed
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Agency Legislative Budget Request


By October 15, Agencies provide the
Legislature and Governor with a
Legislative Budget Request (LBR),
reflecting each agency head’s
independent assessment of needs.
As early as October, the Senate and
House Appropriations Committees
begin developing their respective
budget proposals.
 Committees hold hearings and
workshops in which agencies and
advocates request funding.
Agency
Legislative Budget
Request
SENATE
HOUSE
GOV
Budget Workshops
7
Governor’s Recommended Budget

30 days prior to the Legislative
Session, the Governor submits
his recommended budget.
 The Governor’s budget must
be balanced within available
revenues or must include
recommendations to increase
revenues to sufficiently fund
his budget recommendations.
Agency
Legislative Budget
Request
SENATE
HOUSE
Budget Workshops
GOV
Governor’s
Recommended
Budget
8
House and Senate Budget Proposals

Early in the Legislative Session, the
Appropriations committees are given the
policy guidelines and a funding
allocation.



The committees proceed to develop a
budget proposal which funds specific
programs that fall within those
guidelines and allocations.
Next, the proposed appropriations acts
are considered by both the Senate and
House.
Since the Senate and House
Appropriations bills are never identical,
nor is there usually full agreement on
the policy underlying their development,
a Conference Committee is appointed
to hammer out a compromise
appropriations bill.
Agency
Legislative Budget
Request
SENATE
HOUSE
Budget Workshops
GOV
Governor’s
Recommended
Budget
Proposed
Senate Bills
Proposed
House Bills
Senate Bill
House Bill
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The Conference Report


The Conference Committee
consists of Senate members
appointed by the President and
House members appointed by the
Speaker.
The compromise appropriations
bill is known as the Conference
Report.

The Report may not be amended by
the membership of the Senate or
House, only accepted or rejected.

The Constitution requires a 72hour waiting period between
distribution of a General
Appropriations Bill Conference
Report and its final passage.
Agency
Legislative Budget
Request
SENATE
HOUSE
Budget Workshops
GOV
Governor’s
Recommended
Budget
Proposed
Senate Bills
Proposed
House Bills
Senate Bill
House Bill
Conference
Report
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Gov’s Budget
Office
Budget Instructions & Guidelines
(July 15)
Agency Request
(October 15)
House
Senate
House
Senate
Committee Hearings
(Budget Workshop)
October-February
Committee Hearings
(Budget Workshop)
October-February
Proposed House Bills
(4th Week of Session)
Proposed Senate Bill
(4th week of Session)
House Bills
(5th week of Session)
Senate Bill
(5th week of Session)
Governor
Governor’s Recommended
Budget
(30 days prior to Session)
Conference Report
Operating Budget
11
Key Budget Allocation Decisions






Budget reductions
Measures affecting revenues
Amount of non-recurring revenues to be
spent on recurring programs
“Must funds” and specific program
enhancement priorities
Working capital balance
Separate allocations developed for
House/Senate bills and Conference
12
Recent Budget Changes to the
Constitution
Long Range Financial Outlook

Article III, Section 19(c)(1) provides:
“No later than September 15 of each year, the
joint legislative budget commission shall issue a
long range financial outlook setting out
recommended fiscal strategies for the state and
its departments and agencies in order to assist
the legislature in making decisions.”

Statute provides that the outlook shall be an
annually updated 3 year plan
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Outlook Assumptions



Revenue estimates reflect latest official
Revenue Estimating Conference projections
Expenditure estimates also reflect official
Estimating Conference projections, where
applicable, such as Prisons, Medicaid, and
public school enrollment
Historical spending averages are used for
other key budget drivers, such as economic
development and environmental projects
15
Outlook Summary



The comparison of projected revenues to
expenditures is summarized to display the
anticipated balance forward or deficit
Summaries are provided for recurring and
non-recurring General Revenue and the
major trust funds such as Educational
Enhancement (Lottery) and Tobacco
Settlement Trust Fund
Strategies are developed to address any
negative balances
16
Limits use of Non-recurring Funds for
Recurring Purposes

Article III, section 19 (a)(2) provides:
“Unless approved by a three-fifths vote of the
membership of each house, appropriations
made for recurring purposes from
nonrecurring general revenue funds for
any fiscal year shall not exceed three
percent of the total general revenue funds
estimated to be available at the time such
appropriation is made.”
17
Current Budget Update






FY 2006-07 actual revenues below March 2007 official
estimates by over $400 million
August 1 General Revenue estimating conference
Potential recurring revenue shortfall for FY 2007-08 of
over $800 million
Although an actual cash deficit is not projected due to
reserve balances, budget reductions are being
considered to align recurring appropriations with new
revenues
Joint letter sent to agencies requesting proposed
reductions by August 8
Discussing special session to reduce agency budgets
possibly in September
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