Diane Chime,
Chief of Capital Markets
Legislators consider hundreds of bills during a typical biennial session of the General Assembly, but no legislation is more important to the operation of state government than the bills that compose the state budget.
It is through the enactment of these bills that the General Assembly is able to allocate the state's financial resources among the thousands of competing spending priorities.
Involvement in the budget process by the General Assembly is mandated by the Ohio Constitution, primarily by Article II, Section 22, which states:
"No money shall be drawn from the state treasury, except in pursuance of a specific appropriation, made by law; and no appropriation shall be made for a longer period than two years."
Since a specific appropriation made by law is required in order to spend state money, the General Assembly, as the law-making branch of government, is an essential participant in spending decisions.
The budget established for the operation of a state agency or program, typically based on legislative appropriation, and completed in a two-year period beginning with even-numbered fiscal years.
With the operating appropriations bills, the process begins in the early part of each even-numbered year. The Office of Budget and Management (OBM) initiates the process by submitting to agencies receiving appropriated funds detailed instructions on the process and formats they are to follow in preparing their budget requests, as well as the date by which the requests must be submitted to OBM.
After receiving an agency's budget request, OBM reviews the request and holds meetings and budget hearings with the agency as needed. OBM then works with the Governor and his or her staff to formulate preliminary budget recommendations.
The recommendations are shared with the agencies and may be appealed by them to the Governor. Ultimately, all of the recommended appropriations, including those of the exempt agencies, are published in the executive budget document, the "blue book." Also published in the blue book is a report on "tax expenditures"- revenue not available to the General Revenue Funds, exemptions, and credits in tax laws. This part of the blue book is prepared by the Department of Taxation.
The Governor is required to present the executive budget to the General Assembly within four weeks after its organization early in January of every odd-numbered year. However, in years in which a new Governor takes office, the executive budget may be presented by the new Governor as late as March 15.
The State of Ohio's biennial Capital Budget, enacted in each even-numbered year, provides appropriations for the repair, reconstruction and construction of capital assets of state agencies, colleges, universities and school districts. In some years, funds may also be allocated for community projects of local or regional interest. In general, funding for state highways, bridges and other transportation construction is appropriated through the biennial Transportation Budget, enacted in odd-numbered years. Funding for most capital projects is supported by long-term debt issued by the State or, in some cases, by various cash funds.
The process of enacting a biennial Capital Budget, which begins many months prior to introduction of a capital appropriations bill in the General Assembly, occurs within the context of another activity — preparation of the state's six-year Capital Improvements Plan. This plan is updated biennially by OBM on the basis of recommendations it receives from affected state agencies. The process begins in the late summer of each odd-numbered year, when OBM distributes guidelines to the agencies for the preparation of both the Capital Budget and the six-year Capital Improvements Plan.
As with the biennial Operating Budget, OBM reviews submissions made by state agencies and sends its preliminary Capital Budget recommendations to the Governor. When final decisions have been made, the Governor's budget recommendations are introduced in the General Assembly as the biennial capital appropriations bill. This bill, or in some years a separate piece of legislation, will also include capital reappropriations, which reauthorize the appropriation of unexpended balances from previously approved projects to ensure they can continue uninterrupted toward final completion. After debate and approval by the General Assembly, the capital appropriations bill is sent to the governor for signature, generally in time for funding to become effective at the start of the fiscal biennium.
