Week 3: Budget Processes: Federal and California
• Review first memo assignment
• Federal Budget Process
– Class group exercise
• California Budget Process
– Key features; actors; timelines
• Budget processes -- general
– variables; steps; principles
• CSUS budget process
• Full class exercise (time permitting)
• Preview week 4
Characteristics of “A” Memo
• Headings for each section of assignment, e.g.
Budget Experience
Expectations for PPA 230
Rubin Chapters
• Bullets to make points (not necessary but often helpful)
• Clear, concise, direct sentences
– avoid inexact, “catch-all” phrases
– well proof-read
• Examples to make your points
• Content of budget discussion not figured in this grade
Key Characteristics of Federal Process
• Competing frameworks: Congress v President
• Dynamic: rules and norms change to meet the needs
• Centrality of entitlements v. discretionary
• Focus on deficit control
• Multiple sets of congressional committees
– Budget committees: Budget Resolution
– Revenue committees (not annual process)
– Authorizing committees (like policy committees)
– Appropriations committees (13 separate bills)
Key Characteristics, cont.
• Fragmented
• Decentralized
– Different agency approaches
– Bottom up or top down?
• Public v hidden parts of process
– Different degrees of politicization
• Baseline driven
– Implications of incrementalism
Federal Process: Actors and Timelines
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President
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
Class Exercise: the Federal Budget Process
“The Federal Budget process is excessively complex and
fragmented. The outcomes serve the individual interests of
committee members and the collective interest of the
political parties rather than the public interest of
Americans. Since no regular citizen could understand the
process, it does not serve the purpose of holding public
officials accountable to the public, nor does it reflect public
consensus on budgetary priorities. There must be a better
way.”
Do you agree? Why or why not?
Key Features of State Process
• Greater executive control than in Federal process
• Budget balance requirement
• Focus on agency programs and policy
• One committee, one bill, one process in each house
– Senate Budget and Fiscal Review
– Assembly Budget
– Appropriations committees no budget bill role
• Trailer Bills
• Governor’s Budget sets agenda for budget hearings
• LAO gives item by item analysis (not done by CBO)
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State Budget Process: Actors and Timeline
Governor
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)
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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 Legislature -- Budget Subcommittees
Senate
Assembly
• Education
• Education
• Resources
• Resources
• Health and Human
Services
• Health
• State Administration
• General Government
• Information Technology /
Transportation
• Energy
Budget Process -- Variables
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organizational goals
players
rules/procedures
documents
timelines
norms (request strategies)
balance of executive/legislative power
degree of centralization/coordination
top-down/bottom-up
openness to internal/external members
Steps in a Budget Process
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setting priorities (strategic planning)
estimating revenues
parameters and instructions for budget requests
preparing requests
reviewing requests
constructing the budget
defending the budget
approving the budget
distributing funds – micro decisions
Principles of Effective Budget Processes
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Process matches organizational culture – legitimacy
Appropriate involvement of constituent groups
Structured, annual budget process that is understood
Plans and priorities drive budget
Promotes priority setting and reallocation across budget
Accountability for results
Sufficient time to perform expected tasks
Publish budget decisions
Instruct managers in techniques of budget development
Use budget to encourage desired results
See CSUS budget memo
Design a Budget Process for a School District
Units:
• 4 elementary schools
• 2 middle schools
• 1 high school
Players:
• superintendent/staff
• school board
• 7 principals
• 7 PTAs
Process Variables:
• roles of various players
• authority/balance of power
• rules/procedure
• documents/timelines
• executive v legis power
• degree of centralization
• top down/bottom up
• openness to internal
• openness to external
Preview of Week 4
• Thurmaier and Willoughby
– did everyone pick up the chapter in class?
– application of Kingdon to budgeting
• Bland and Rubin Chapter 4 (not Rubin text!)
• Guest Speaker from Dept of Finance
• memo #2 due – you need to pick your department or
agency!