Arkansas Budget and
Appropriation Process
Bureau of Legislative Research, 2008
The Budget Process
Preparation
Review/Revise
Authorization
Funding
THE BUDGET PROCESS
Preparation
The Preparation Phase
Budget Calendar
The State Fiscal Year Begins on July 1 and
Ends on June 30.
A Biennial Period or Biennium is a two year
period that usually begins July 1 of the oddnumbered year and ends June 30 of the next
odd-numbered year.
Regular Session Budget Calendar
Jun
Budget Requests Prepared
Executive Review
ALC/JBC Hearings
Official Revenue Forecast
Session Convenes
Joint Budget Meetings
Legislature Adjourns
Operating Budgets
Prepared
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Fiscal Legislative Session
• On November 4, 2008 Arkansas voters approved a
proposed constitutional amendment that becomes
effective January 1, 2009 that in-part provides:
• The General Assembly shall meet every year
• The General Assembly shall meet in Regular Session
on the second Monday in January
• Beginning in 2010, the General Assembly shall meet in
Fiscal Session on the second Monday in February
• A bill other than an appropriation bill may be
considered in a Fiscal Session if two-thirds (2/3) of the
members of each house of the General Assembly
approve consideration of the bill
Fiscal Legislative Session
• A Regular biennial session shall not exceed sixty (60)
calendar days unless extended by a two-thirds (2/3) vote
of the members of each house of the General Assembly
and shall not exceed seventy-five days (75) days in
duration, unless extended by a three-fourths (3/4) vote of
the members of each house of the General Assembly
• A Fiscal Session shall not exceed thirty (30) calendar days
in duration, except that by a vote of three-fourths (3/4) of
the members of each house of the General Assembly a
Fiscal Session may be extended one (1) time by no more
than fifteen (15) calendar days.
• No appropriation made by the General Assembly after
December 31, 2008 shall be for a longer period than one
(1) fiscal year
• In making appropriations for any fiscal year the General
Assembly shall first pass the General Appropriation Bill
The Preparation Phase
Budget Requests
A Budget Request Commitment Item Format
Title
Regular Salaries
No. Positions
Personal Svs Match
Operating Expenses
Conf Fee & Travel
Capital Outlay
Prof. Fees &
Services
Advertising
Total
FUNDING
Fund Balances
General Revenue
Special Revenue
Federal Funds
Total Funding
Actual
$200,000
12
42,000
665,000
58,776
123,241
Budgeted
$352,000
16
73,920
541,530
60,000
101,000
Base
$361,856
16
75,990
529,604
60,000
-
Total
$486,856
22
102,240
728,354
78,000
300,000
82,150
-
71,550
-
71,550
-
171,550
300,000
$1,171,167
$1,200,000
$1,099,000
$2,167,000
$2,100,000
400,000
37,000
$1,365,833
474,000
50,000
$689,833
474,000
61,000
$2,537,000
$1,889,833
$1,224,833
$689,833
474,000
61,000
$1,224,833
The Preparation Phase
Roles In Budget Preparation
“In state budgeting, gubernatorial
leadership is a dominant
consideration.”
(Changing State Budgeting: S. Kenneth Howard, 1973)
Roles in Budget Preparation Phase
Governor/DFA
• Set Policy for Agency
Requests
• Forecast State
Revenue
• Recommend Budget to
ALC/JBC
• Recommend Added
Revenues as Needed
Roles in Budget Preparation Phase
83 Members
Legislative Council
/ Joint Budget
• Consider Agency
Requests & Governor’s
Recommendation
• Recommend Budgets to
General Assembly
• Recommend State
Employee Salary Levels
• Have Bills Prepared for
Introduction
Roles in Budget Preparation Phase
Joint Budget
Committee
56 Members
• Consider ALC/JBC
Recommendations
• Consider Governor’s
Revisions and New
Programs
• Consider MemberSponsored Bills
• Recommend Fiscal Bills
and Pay Levels to General
Assembly
• Prepare Revenue
Stabilization Amendment
Legislature
“Legislators get caught spending inordinate
amounts of time trying to save relatively
trifling sums.”
(Changing State Budgeting: S. Kenneth Howard, 1973)
THE BUDGET PROCESS
Authorization
AN APPROPRIATION GIVES THE
AGENCY THE AUTHORITY TO SPEND
MONEY IF AND WHEN IT BECOMES
AVAILABLE.
=
The Authorization Phase
The Constitutional Requirements
Constitutional Restrictions

1 Year Limit on Appropriations

Single Subject

General Appropriation Bill must "embrace
nothing but appropriations for the ordinary expenses
of the executive, legislative and judicial departments
of the state” & be passed first


Appropriations must be in dollars and cents
Appropriations (except for education, highways,
and debt of the state) must be approved by 3/4
affirmative vote
The Authorization Phase
Types of Appropriation Bills
Introduced
Appropriation Bills
1600
1496
1400
1200
1163
1000
922
800
691
600
528
400
200
1326
309
348
370
429
475
0
1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Types of Appropriation Bills
• Regular Agency Operating Appropriation
– 1-year period
– Effective July 1
• Supplemental Appropriation
– Effective before July 1 & usually immediately
– Usually adds to an existing authority
– State Funds usually come from an Accumulated
Surplus or recovered Fund Balances
• Construction
– State Funds usually from General
Improvement Fund (Surplus & Interest
Earnings)
• Reappropriations
– Allows the Agency to spend the balance of
an appropriation provided by another
General Assembly.
– Not new authority to spend
– Usually for old construction projects
The Authorization Phase
Elements of an
Appropriation Bill
WHO?
FROM WHERE?
SECTION 2. APPROPRIATION - OPERATIONS. There is hereby appropriated,
to the Abstracters' Board of Examiners, to be payable from the Abstracters' Examining
Board Fund, for personal services and operating expenses of the Abstracters' Board of
Examiners for the 2008-09 fiscal year, the following:
ITEM
NO.
(01) REGULAR SALARIES
(02) PERSONAL SERVICES MATCHING
(03) MAINT. & GEN. OPERATION
(A) OPER. EXPENSE
(B) CONF. & TRAVEL
(C) PROF. FEES
(D) CAP. OUTLAY
(E) DATA PROC.
TOTAL AMOUNT APPROPRIATED
HOW MUCH?
FISCAL YEAR
2008-2009
$ 20,193
8,264
$
2,567
0
0
0
0
31,024
FOR WHAT?
The Authorization Phase
FROM WHERE?
The Budget Process
Funding
TOTAL STATE REVENUE
FY 2008
General Revenue
$ 5,618,456,330
Special Revenue
1,691,902,903
Cash Funds
3,748,891,979
Federal Funds
4,246,431,485
Trust & Other Non Revenue
2,732,221,175
TOTAL STATE REVENUE
$18,037,903,873
TOTAL STATE REVENUE – 2008
$18 Billion
Trust & Other
Non Revenue
General Revenue
15%
31%
Special
10%
Federal
24%
Cash
21%
GENERAL REVENUE - 2008
$5.6 Billion
Luxury
Other
3%
Insurance
1%
2%
Income
Taxes
56%
Sales/Use
38%
SPECIAL REVENUES - 2008
$ 1.7 Billion
Property Tax
Game & Fish
Relief
5%
14%
Other
35%
Highway
Users
37%
Natural
Finance Resources
3%
6%
SPENDING IS LIMITED BY THE
AVAILABLE APPROPRIATION OR THE
AVAILABLE MONEY - WHICHEVER IS
LESS!
A Program must have
both an appropriation
and a means of getting money to it.
If one or the other is
missing, the program cannot exist.
Three Methods of Funding Available
•DEDICATED
SOURCE
•GENERAL
IMPROVEMENT
FUND
•REVENUE
STABILIZATION LAW
Three Methods of Funding Available
•DEDICATED
SOURCE
The Constitution says “…no moneys
arising from a tax levied for one purpose
shall be used for any other purpose.”
DEDICATED SOURCES OF FUNDS
•State Dedicated Tax or
Fee (Special Revenue)
•Federal Grant-in-Aid
•Cash Funds
•Trust Funds
•Non-revenue Receipts
Tobacco Settlement Cash
Holding Fund
Healthy Century Trust Fund
(First $100 Million +
Interest+ Unneeded Funds
in Debt Service Fund)
Tobacco Settlement
Debt Service Fund
($5 million/year)
UAMS Biosciences $2.2 M
ASU Biosciences $1.8 M
School of Public Health $1 M
Tobacco Settlement Program Fund
(Remainder of 2001 after Healthy Century Transfer
and remainder after Debt Service Fund Transfer
Thereafter)
31.6%
15.8
22.8%
Prevention and
Cessation Program
Account
Targeted State Needs Program
Account
29.8
22% Delta AHEC
Interest
Arkansas
Biosciences
Institute Program
Account
33% School of Public
Health
Interest
Interest
Medicaid
Expansion Program
Account
Interest
Interest
Tobacco
Commission Fund
22% Center on
Aging;
23% Minority Health
Initiative
Three Methods of Funding Available
•DEDICATED
SOURCE
•GENERAL
IMPROVEMENT FUND
$500.0
General Improvement Fund
Income and Authorized Funding
Income
Authorized Funding
Millions
$400.0
$300.0
$200.0
$100.0
$1991- 1993- 1995- 1997- 1999- 2001- 2003- 2005- 200793
95
97
99
01
03
05
07
09
Three Methods of Funding Available
•DEDICATED
SOURCE
•GENERAL
IMPROVEMENT
FUND
•REVENUE
STABILIZATION LAW
ACT 311 of 1945
The Revenue Stabilization
Law
Revenue Stabilization Law
Revenue Flow
The Budget Process
Review/Revise
CAUTION!!!
“...since the practice of review and advice
violates the separation of powers
doctrine, [it] is unconstitutional.”
CHAFFIN v. ARK. GAME & FISH COMM'N, 296 Ark. 431 (1988)
Legislative Council SubCommittees
•Contracts
•Methods of Finance
•Leases
REVIEW
•Budget Adjustments
•Misc. Federal Grants
PEER
•Interagency Contracts
Rules & Regulations
RULES & REGULATIONS
•Special Entry Rates
•Titles & Grade Changes
•Personnel Policy Changes
•Pay Plan
PERSONNEL
•Lawsuits Against the State
•Out-of-Court Settlements
LITIGATION
•Approved Claims
Against the State
•Appealed Claims
CLAIMS REVIEW
•Correctional Institutions
•Other State Institutions
•Purchased Institutional Services
CHARITABLE, PENAL & CORRECTIONAL
INSTITUTIONS
The Budget Process
Preparation
Review/Revise
Authorization
Funding
Arkansas Budget and
Appropriation Process
Bureau of Legislative Research, 2008