Overview of Oklahoma's State Budget Process
Adapted from the 2001 Governor's Budget Book
On October 1 each year state agencies are required by law to submit a "Budget Request" detailing their funding needs for the next fiscal year. Budget Requests are reviewed by the Budget Division of the Office of State Finance (OSF) and by legislative staff. There is no formal process for budget request revisions, but agencies can relay needed changes to their requests by contacting OSF Budget Staff and members of the legislative staff.
The Governor prepares and submits to the Legislature at the beginning of each annual session a balanced budget based on OSF review of budget requests prepared by state agencies and subsequent recommendations by OSF, cabinet members and policy advisors. Budgeted expenditures can not exceed the amount available for appropriation as certified by the State Equalization Board unless revenue raising measures are proposed to balance the spending recommendation.
Not more than 45 days nor less than 35 days prior to the convening of each regular session of the Legislature, the State Board of Equalization certifies amounts available for appropriation. A second meeting of the Board is held within five days of the monthly apportionment in February. At these two constitutionally-mandated meetings estimates of revenue to each annually appropriated fund are based on a determination of the revenues to be received by the State under the laws in effect at the time such determination is made. These estimates are based on predictable changes in the economy as well as current law.
Should the Legislature enact laws that provide additional revenues or a reduction in revenues to these certified funds, the Board meets to determine the changes in revenue. Only those changes in revenue resulting from changes in law can be considered at the third meeting.
Funds subject to appropriation by the Legislature are those funds which are certified for appropriation by the Board (the General Revenue Fund, the Council on Law Enforcement Education and Training Fund, the Commissioners of the Land Office Fund, the State Judicial Fund, the Mineral Leasing Fund, the Special Occupational Health and Safety Fund, the Public Building Fund, and the State Transportation Fund) and the cash balances residing in certain non certified funds including the Constitutional Reserve Fund, the General Revenue Cash-flow Reserve Fund, and the Special Cash Fund.
Budgetary Controls: The legal level of budgetary control is maintained at the lineitem level (General Operations, Duties, etc.) identified in appropriation acts. Agency budgets may be modified subject to statutory limits on transfers using the Budget Work Program. The Director of State Finance can approve transfers between line-items up to 25 percent. The Contingency Review Board (a three-member board comprised of the Governor, the President Pro Tempore of the Senate and the Speaker of the House of Representatives) can approve transfers between lineitems up to 40 percent. All transfers are subject to review by the Joint Legislative Committee on Budget and Program Oversight to determine if the transfer tends to effectuate or subvert the intention and objectives of the Legislature.
During the fiscal year, it is possible that actual revenues are less than the estimates made when agency budgets are prepared. If revenues are not sufficient to cover appropriations, the Director of State Finance is required to reduce the budget by the amount of the deficiency.
The budget cycle for state operations starts with state agencies developing a detailed outline of financial needs for the next fiscal year. This "Budget Request" is then reviewed and analyzed by the Budget Division of the Office of State Finance (OSF) in light of overall state responsibilities, goals, objectives and total funds available. The Governor's recommended budget is then developed. The Governor's recommended budget is considered by the State Legislature which makes the final appropriation of funds to the agencies.
A state agency, based upon funds appropriated by the Legislature and other funds available to the agency, then develops a Budget Work Program which outlines in detail planned expenditures for the ensuing fiscal year. Work programs are reviewed by the Budget Division of the OSF and the approved work program will serve as a basis for the subsequent allotment of funds. Budget Work Programs can be revised at any time during the fiscal year if justified and if the revision can be accomplished within various expenditure, full-time-equivalent employee and program expenditure limits.