Budget basics and process reviewed for incoming committee members

Dayton, a Legislative Research analyst, told the Committee on Social Services Budget that the state budget is built from three primary revenue sources — the state general fund, state special revenue funds and federal funds — and that state expenditures are grouped into categories such as salaries and wages, contractual services, commodities, aid to local governments, other assistance (including Medicaid) and capital improvements.

The memo Dayton referenced walks new committee members through how agency requests, legislative budget recommendations and approved appropriations line up: agencies submit requests for the coming budget year (and, for some biennial agencies, a second out-year); the Legislative Budget Committee (LBC) reviews requests during the interim and issues recommendations; the committee’s recommendations feed into House Appropriations and later into a House–Senate conference that produces final budget bills.

Dayton emphasized performance-based budgeting as an additional lens committees will see in budget summaries. He told members the summaries they will hear are prepared to compare the agency request to the LBC recommendation and to the most recent legislative appropriation so the committee can see where changes were proposed during the interim.

Members asked procedural questions about the new LBC column in the budget summaries and how it differs from prior practice when committees compared agency requests to the governor’s recommendation. Representative Ballard said the two-step comparison (agency and LBC) is an unfamiliar rhythm to some long-serving members and that committees should expect additional reconciliation work as appropriations move forward.

Dayton said committees will begin formal appropriation deliberations next week, using the LBC recommendations as a starting point but with the option to restore or alter enhancements when making their own committee recommendations.