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Table 7-1: Executive Authority to Cut the Enacted Budget
September 2008
INTRODUCTION: States provide various degrees of authority for governors to reduce budgeted expenditures in certain circumstances. Because a table cannot capture these fully, readers are advised to check the notes for each state for details.
The column heading "No Restrictions" indicates that the executive can cut selectively or across the board in all areas without gaining consent from the legislature although in some states the governor must notify the legislature. The column headed " Governor May Reduce Allocations but not Appropriations or the Budget" indicates states that allow a governor authority to impound funds, reduce agency allocations or restrict agency spending in some fashion, but where a governor may not unilaterally reduce an appropriation or the state budget.
Arkansas and Kentucky require a governor's budget cuts to carry out contingency plans that are included in budget enactments; see notes for those states.
Most states do not allow the governor to reduce the legislative or judicial branches' budgets without their consent regardless of what other authority the governor may have over the budget. Most states explicitly state that payments of principal and interest on debt may not be reduced. Because these provisos are widespread, they are not included in the table or the accompanying notes.
*Notes:
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Alabama -- The legislature's approval is required for any cuts other than across-the-board. Statutes, court rulings and opinions of the attorney general exclude some appropriations from across-the-board cuts. These include appropriations for the Alabama School for the Deaf and Blind, the employer’s share of Social Security and retirement, debt service, the Department of Youth Services for the care and maintenance of children committed to the custody of the state after being adjudicated delinquent, some parts of the appropriations related to Alabama’s higher education desegregation case, appropriations for necessary expenses of government for which the Legislature has made an estimated appropriation, and any appropriations determined by the courts or legislature to be an “essential function” of state government. In 1993 the Supreme Court ruled that funding for the judicial branch cannot be reduced below what is “adequate and reasonable” for the judicial branch to perform its constitutional duties. This opinion noted that the chief justice, not the governor, must determine the constitutional duties that must be adequately funded and the level of appropriations required to do so.
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Statutory: § 41-4-90
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Alaska -- A court decision puts this authority under question.
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Statutory: § 37.07.080 (g)
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Arizona -- Although the governor has unilaterally reduced state spending, authority to do so was limited by the state supreme court ruling in Rios v Symington in 1992. It provides that the governor cannot order agencies to stop spending their appropriations if doing so would substitute the executive's priorities for legislative priorities. In practice, the legislature usually has approved reductions exceeding 1 percent of expenditures through amendments to the original general appropriations bill.
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Rios v Symington, 1992
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Arkansas -- The governor must make cuts according to the guidelines established by the legislature in a bill passed every two years concerning the distribution of funds.
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Biennial legislation
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California -- The governor may reduce the budget only with specific authority granted to the administration by the legislature in a budget act or other specific legislation.
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N/A
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Colorado -- When a revenue shortfall occurs, the governor is required to (1) formulate a plan for reducing general fund expenditures so that the general fund reserve does not fall below one-half of the 4 percent reserve; (2) notify the General Assembly of the plan; (3) implement the plan; and (4) transfer general fund money from the capital construction fund to the general fund (and restrict capital construction projects) if the governor's plan reduces general fund expenditures by at least 1 percent of the total amount of general fund appropriations for the fiscal year.
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Statutory: CRS 24-75-201.5; 24-2-103; 24-50-109.5
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Connecticut -- Legislative approval is required when the total appropriated amount must be reduced by more than 5 percent. If a fund must be reduced by more than 3 percent or an appropriation account must be reduced by more than 5 percent, Finance Advisory Committee approval is required. Appropriations acts may authorize spending reductions for the biennium for which they are in effect.
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Statutory: § 4-85b
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Delaware -- The director of the Office of Management and Budget is empowered to exercise, subject to the approval of the governor, such control over the monthly and/or quarterly rates of agency expenditures of funds appropriated to such agency as the director may deem necessary to assure the effective and continuous operation of the various agencies during the fiscal year.
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Statutory: Title 29 § 6529
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Florida -- General revenue reductions for education can be in no greater proportion than the reduction in total general revenue appropriations. General revenue deficits greater than 1.5 percent of general revenue appropriations must be resolved by the legislature. The legislature shall prescribe by general law conditions under which limited adjustments to the budget, as recommended by the governor or the chief justice of the supreme court, may be approved without the concurrence of the full legislature.
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Constitutional: Article III, § 19 (c) 3; Article IV, § 13
Statutory: §§ 216.221
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Georgia -- The executive branch may withhold appropriations, but may not cut the budget without legislative approval.
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N/A
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Hawaii -- The director of finance may modify or amend any previous budget allotment upon notice to the department or establishment concerned. Prior to the implementation of any modification in allotment proposed by the director of finance in which the sum of the modifications exceed 2.5 percent of the total general fund appropriation made by the legislature in any fiscal year, the director shall notify the president of the senate, the speaker of the house of representatives, and the chairpersons of the senate committee on ways and means and the house of representatives committee on finance, respectively, of the director's intent.
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Constitutional: Article III, Sec. 16; HRS 37-31ff
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Idaho -- The governor can, by executive order, reduce agency allotments as necessary. Legislative concurrence is not required. Reduction of legislative and judicial budgets requires permission of those branches of government.
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Constitutional and Statutory
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Illinois -- There are no restrictions on the governor's authority to cut the budget with respect to executive agency operations and capital.
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Indiana --
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Statutory: IC 4-12
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Iowa --
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Statutory: Chap. 8.31
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Kansas -- The governor has authority to cut across the board, with certain limitations, to restore the state general fund estimated year-end balance to not more than $100 million. As interpreted by the attorney general's opinion, law allows the governor to reduce appropriations as he or she sees fit (no legislative or judiciary reductions), but only to the extent that cuts would result in year-end zero balances. In the two instances where such reductions have occurred, budget reductions were sanctioned by appropriations acts that permitted the lapse of funds. The State Finance Council, which includes legislative leaders, must agree to the governor's proposed reductions.
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Statutory: KSA 75-6704 and KSA 75-3722 et seq
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Kentucky -- If revenues are up to 5 percent below official estimates, an enacted reduction plan is implemented, which includes application of budget reserve funds, general fund surplus account resources, and other budget reduction actions. The law makes no provision for shortfalls greater than 5 percent.
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Statutory: 48.130
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Louisiana -- The maximum reduction is 10 percent of a budgetary unit. Appropriations for certain retirement programs and minimum foundation program for education may not be reduced except by written approval of two-thirds of the members of each house of the Legislature.
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Constitutional: Article VII, §. 10 (F); Statutory: L.A.R.S. 39:75
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Maine -- Reductions are triggered only when estimated revenue under-performs; any reduction proposed must be "equitable" and a "temporary curtailment" (i.e., until the legislature acts). The governor is required to notify the legislature of proposed cuts but does not need its consent.
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Statutory: 5 MRSA §1668
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Maryland -- The maximum reduction is 25 percent of any item of appropriation. These items may not be reduced: appropriations for payment of interest and retirement of state debt; appropriations to the legislature, public schools' local health formula and the judiciary; and salaries of public officers during term. Salaries of merit system employees may be reduced through the secretary of personnel.
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Statutory: State Finance and Procurement Article, § 7-213
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Massachusetts -- The governor cannot reduce appropriations without legislative approval. The governor may reduce agency allotments, however, within 15 days of being notified of a revenue shortfall.
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Statutory: Chap. 29, § 9c
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Michigan -- The governor, by executive order and with the approval of the appropriations committees, can reduce expenditures whenever it appears that actual revenues for a fiscal period will fall below the revenue estimates on which the appropriations for that period are based. By statute, any recommendation for the reduction of expenditures must be approved or disapproved by both of the appropriations committees within 10 days after the recommendation is made. A reduction cannot be made without approval from both committees; not later than 30 days after a proposed order is disapproved, the governor may submit alternative recommendations for expenditure reductions to the committees for their approval or disapproval. The following may not be reduced: expenditures of the legislative and judicial branches and funds for constitutionally-dedicated purposes.
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Constitutional: Article V, § 20; Statutory: 18.1391-1392
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Minnesota -- The governor can make reductions only in the case of a state budget shortfall and only when the budget reserve has been exhausted. Statutes require consultation with the Legislative Advisory Commission.
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Statutory: 16A.152 Subd. 4
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Mississippi -- The governor can cut selectively up to 5 percent. After all agencies are cut up to 5 percent, then additional cuts must be equal and uniform. Cuts can be initiated at the governor's discretion; also, the governor is required to cut spending if revenues fall below 98 percent of the estimate after October.
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Statutory: 27-104-13
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Missouri --
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Constitutional: Article IV, § 27 Statutory: § 33.290 RSMO
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Montana -- The governor cannot "un-appropriate," but the governor can order a reduction in expenditures by all state agencies when certain statutorily defined conditions are met. A maximum of 10 percent of the budget for any program within an agency may be reduced.
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Statutory: § 17-7-140
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Nebraska -- The governor has no legal authority to reduce appropriations, other than administrative controls that may be applied to agencies under the governor's direct control, to manage spending. However, the governor can request agencies to reduce their expenditures, and can enforce that request for those agencies where the governor has appointed the department head. Only the Legislature can reduce the appropriation to an agency by amending the appropriation during a regular session or special session.
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N/A
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Nevada -- Budget reductions above the threshold require the approval of the Interim Finance Committee.
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Statutory: NRS 353.225
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New Hampshire -- The governor may cut the budget for executive branch appropriations with prior approval from the Joint Legislative Fiscal Committee.
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Statutory: RSA 9:16-b
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New Jersey -- The governor may control the rate of expenditures by state agencies through his or her allotment and reserve powers, or through enjoinment in the case of "extravagance, waste or mismanagement."
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Statutory: N.J.S.A. 52: 27 B-26 and 52: 27B-31
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New Mexico -- The executive may limit executive-agency expenditures, which do not include the judicial branch, universities and public schools. The Legislature is the only entity that can actually reduce appropriations levels.
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New York -- The governor cannot reduce appropriations without legislative action, but can choose not to spend money appropriated by the legislature for state agency operations, capital projects, and debt service. The governor cannot reduce expenditures for local assistance pursuant to a court decision interpreting the constitution nor can the governor reduce payments for the legislature or judiciary.
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Constitutional: Article IV, § 30
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North Carolina -- The executive has power to reduce expenditures when revenues are not sufficient to meet appropriations, but the governor must immediately notify the General Assembly if a deficit is anticipated and must report, in a timely manner, a plan to reduce expenditures or other actions being implemented to avert the deficit.
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Constitutional: Article VII, § 2
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North Dakota -- The executive branch can cut across the board without consulting the legislature except when the budget reduction is the direct result of an initiative or referendum action.
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Statutory: § 143C-6-2
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Ohio --
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Constitutional: Article VIII, § 3; Statutory: § 126.05
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Oklahoma -- The legislature's approval is required for other than across-the-board reductions.
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Constitutional: Article 10, § 23; Statutory § 62 - 41.9
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Oregon -- The governor may reduce agency allotments only when a quarterly revenue forecast indicates that the projected balance in the general fund at the end of the biennium will be less than zero. The allotment reductions must be made across-the-board, affecting all appropriation lines in the budget equally and in a total amount to return to a zero position. Reductions in allotments are not considered to be a change in the appropriation. The governor has no authority to reduce the budget for a future contingency; only the legislature in a regular or special session has this authority.
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Statutory: ORS 291.261
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Pennsylvania -- If a governor predicts that a deficit might exist by the end of the fiscal year because of a current revenue shortfall, part of agency funding (what is sometimes called appropriations authority) can be moved into a budget reserve, thus requiring agencies to reduce spending.
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Constitutional: Article IV, § 16
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Rhode Island -- Practice is for the governor to recommend changes in appropriations through the statutory supplemental appropriations process to deal with any budget issues that emerge in the course of the fiscal year.
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Statutory: §§ 35-3-8; 35-16-3
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South Carolina -- The executive-legislative Budget and Control Board is responsible for avoiding year-end deficits and can make uniform across the board reductions to agency budgets. Any reductions the board orders while the General Assembly is in session must first be reported to the General Assembly. It has five session days to prevent the reduction before the board's reductions take effect.
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Statutory: § 11-9-890; Appropriations bill
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South Dakota --
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SDCL 4-8-23
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Tennessee -- The governor may call a special session to deal with a deficit.
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None
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Texas -- The governor may request that agencies reduce spending, call the legislature into special session to cut appropriations, or propose cuts using constitutional and statutory budget execution authority. The governor's proposed cuts, using budget executive authority, are subject to the approval of the Legislative Budget Board.
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Constitutional: Article 16, § 69; Statutory: Chap 317, Government Code
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Utah -- If the governor wants to reduce appropriations, he or she must call a special session of the Legislature. If total revenues accruing to a fund are not sufficient to cover the appropriations, however, the governor may reduce allotments to agencies by the amount of the deficiency or alter agency work plans to slow spending. The governor may also address shortfalls with allocations from the governor's emergency appropriations, with advance notice to the budget subcommittee of the Legislative Management Committee.
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Statutory: §§ 63J-1-405(c) ff
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Vermont -- If revenues fall more than 1 percent below the estimate when the legislature is out of session, the Secretary for Administration is to prepare a rescission plan for the review of the Joint Fiscal Committee of the legislature. The committee may request changes or reject the plan. A disapproved plan will not be implemented. The governor has no authority to reduce appropriations unilaterally to balance the budget.
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Statutory: 32 VSA 704
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Virginia -- The governor may reduce appropriations only when an official re-estimate of the revenues shows spending at a rate above projected revenues. Reductions are limited to 15 percent of an agency's appropriation.
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Appropriation Act
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Washington -- The governor can reduce agency allocations across the board only if there is a revenue shortfall. The Legislature must pass a bill to cut the budget and must approve any gubernatorial cut other than an across-the-board reduction.
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Constitutional: Article 8, § 4; Statutory: RCW 43.88.110(8)
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West Virginia -- The governor can cut only across the board. In addition, after notifying the legislative leadership, the governor can cause an amount to be borrowed from the revenue shortfall reserve fund by October 31 to be repaid within 90 days. This provision was enacted for use primarily at the beginning of the fiscal year when the general revenue funds available to cover appropriations quite often start with a zero balance. The governor also can call a special session of the Legislature no earlier than November 1 for the purpose of making supplemental appropriations to meet anticipated shortfalls or can request supplemental appropriations during the next regular session.
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Statutory: WVC 11B-2-20 to 11B-2-22
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Wisconsin -- Following budget enactment, if previously authorized expenditures are determined by the secretary of administration to exceed available revenue, but by less than 0.5 percent of the total general purpose revenue appropriations for the year, the secretary may unilaterally take action to adjust executive branch agency expenditures (except for aid programs) to meet the revenue shortfall. If estimated expenditures are expected to exceed available revenues by more than 0.5 percent of general purpose appropriations, then the governor is required to submit a bill to the Legislature to correct the imbalance.
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Statutory: § 16.50 (2)
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Wyoming -- Reviewed every two years.
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Appropriations Bill
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Guam -- The governor may control the rate of expenditures through allotment authority and may exercise administrative controls on agencies under his or her direct control to manage spending.
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None*
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Northern Mariana Islands -- Under the constitution, the governor may mobilize available resources to respond to emergencies like a civil disturbance, national disaster or other calamity. Under P.L. 3-68, the governor may control expenditures of the government (general fund) except the Legislature. Under certain conditions, the governor may even rescind or defer the budget authority or exercise emergency impoundments.
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Constitutional: Article 111, § 10 and 1 CMC 7601, 7602 and 7604
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Puerto Rico --
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N/A
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Posted March 1999, reviewed September 2008.
Email statebudget-info@ncsl.org for more information.
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