The development and implementation of the state budget occurs in several distinct and cyclical phases. The process begins with the formation of agency budget requests, which represent a comprehensive collection of funding needs and strategies designed to meet the service level needs for their respective programs and initiatives. These requests are formed within the structure defined by the budget development instructions and guidelines, issued by the Governor several months prior to the agency request deadline of September 1. All agency requests are submitted to the Office of Planning and Budget (OPB) by this date, as required by law.
The next phase of the development process starts when OPB begins to analyze the agency requests in the context of the anticipated level of available state revenue for the upcoming fiscal year. By law, Georgia’s budget must be balanced – there is no ability to enact deficit spending. Thus, a revenue estimate must be formed every year to provide a framework for the development of the upcoming fiscal year budget. According to state code, the Governor is responsible for the development of this estimate, which guides the formation of the budget recommendations.
OPB budget analysts carefully examine the agency budget requests – proposed expenditures and existing resources are reviewed in terms of their appropriateness to state policy goals and objectives and cost effectiveness, as well as many other variables affecting the operation of state government. A series of meetings between the governor and his staff are held in October and November, during which the OPB analysts brief the governor on agency requests, and make preliminary recommendations based upon these analyses. The governor then formulates his tentative recommendations. The governor may also meet with department heads to review these requests and recommendations.
The final phase of the development process begins following the delivery of the Governor’s Budget Report. This document represents the entirety of the Governor’s budget recommendations as presented to the General Assembly. State law requires that this publication be provided to the General Assembly within five days of the legislature’s convening in January. The Assembly begins their review of the recommendations by development an Appropriations Act – a bill representing the formal law by which state funds are provided to the various state agencies. This bill begins in the House, where it is reviewed, amended, and eventually approved and transferred to the Senate.
Once the Senate has adopted their substitute to the House bill, they send the bill back to the House for acceptance or rejection. Generally, there are discrepancies between the two versions of the bill, at which time a Conference Committee composed of members of both chambers is appointed and convened. The Conference Committee agrees on a compromise proposal to be voted on by both the House and Senate. Once this uniform bill has passed, it is sent to the Governor for his signature, who then has 40 days to sign the legislation before it automatically passes into law. The Governor is able to affect the Appropriations Act through the constitutional right of line-item veto.
Once an Appropriation Act has been passed by the General Assembly and signed into law, OPB is responsible for ensuring that all state expenditures conform to the legislative mandate and spending by agency programs do not exceed authorized amounts. This is accomplished through approval by OPB of an annual operating budget, quarterly allotments, and various expenditure analyses. After the fiscal year ends, the State Auditor is responsible for auditing all expenditures of every state agency and operation, including all colleges and universities, authorities and school districts.
There are generally two types of budgets passed as Appropriation Acts each year: an “amended” fiscal year budget, and a separate budget that refers only to the upcoming fiscal year. As the Assembly’s session ends prior to the closure of that current fiscal year (June 30), amendments to the prior year’s Appropriation Act can be made, and are known collectively as the “amended” budget. These adjustments are generally made to compensate for discrete changes to enrollment data for education funding formulas, and for other unanticipated needs that occur during the fiscal year. The upcoming fiscal year’s budget begins following the closure of session, and represents a spending plan containing the best estimate of state revenues available beginning July 1, and the expenditures authorized by the General Assembly and Governor.