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State Budget Procedures

State Budget Procedures

BALANCED BUDGET REQUIREMENTS

Budget bill Balancing the budget is widely considered to be the foundation of state fiscal practices. Keeping a budget balanced in times of fiscal stress, however, can be an overwhelming challenge for policymakers. This report reviews the meaning of a state balanced budget and identifies the statutory and constitutional provisions that various authorities identify as the requirements that apply.

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ANNUAL VS. BIENNIAL BUDGETING

Calendar The trend among state governments for the past 70 years has been to abandon biennial budgeting for annual budgeting. One reason for the change was the resurgence of state legislative power in the middle of the 20th century. Legislatures’ growing role in state government can be measured by the shift from biennial to annual legislative sessions.

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OVERVIEW | STATE BUDGET PROCEDURES

Budget procedures, the way states produce their budgets, vary in America's state and territorial legislatures. Important structural differences include the nature of a state requirement to balance the budget; an annual or biennial budget cycle; the governor’s authority to revise the enacted budget; and whether earmarked or federal funds are subject to the appropriations process. The most important political difference among states is the balance between legislative and executive authority in composing the budget. Governor’s line-item vetoes are one element in legislative and executive balance, but tradition and partisanship are equally decisive. 

Whether the executive or legislative branch dominates the budget process, there is generally cooperation between the branches. It is expected that a state will enact a balanced budget before the beginning of its fiscal year. Late budgets and vetoes are most likely when a state is experiencing serious fiscal difficulties. Otherwise, executive and legislative negotiations are intended to resolve budget disagreements and avoid vetoes and late budgets.  

States use different types of budgets, including line-item, program-based, performance-based, and modified zero-based. Most state fiscal years end on June 30, although four states follow a different schedule.

 

 
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