When the legislature reconvenes in January for the 2019 legislative session, a new General Assembly and a new Gubernatorial Administration will have to craft and implement a new biennial state budget. This overview will explain the legislature’s constitutional obligations to preparing that budget, the legislative process they use to get there, and the Governor’s role in that process. Understanding the State budgetary process is one of the most crucial components of effective advocacy.
The State Constitution and the Budgetary Process
Connecticut has adopted two key constitutional amendments that influence the legislature’s budgetary process. The first was enacted in 1970 and established the legislature’s ‘short session’, which convenes in February of odd numbered years. The amendment also tries to limit the legislature’s business in short-sessions to “budgetary, revenue and financial matters, bills and resolutions raised by committees of the general assembly and those matters certified in writing by the speaker of the house of representatives and president pro tempore of the senate to be of an emergency nature” (CT Const. Article III, section 2).
The second constitutional reform was adopted in 1992 and is better known as the State’s constitutional spending cap. The cap was overwhelmingly approved by voters in a statewide referendum in 1992, but has encountered roadblocks in its statutory implementation. However, a statutory spending cap was eventually adopted as part of the legislature’s bipartisan budget that passed in a 2017 special session.Passage of the Constitutional Amendment was inextricably linked with the adoption of a state income tax law during the 1991 Special Session, but the floor debate barely mentioned the other crucial component of the amendment. The amendment also specifies that “general budget expenditures authorized for any fiscal year shall not exceed the estimated amount of revenue for such fiscal year” (CT Const. Article III, section 18). Thus the legislature is left with a constitutional obligation to prepare a balanced budget for each fiscal year. This provision requires the legislature to frequently make mid-biennial budgetary adjustments.
The Executive Branch
The state budget is drafted in odd numbered years (long-sessions) and begins with the Governor’s budget recommendations, which are due to the legislature by February. The executive branch begins its budgetary process the August prior to the convening of a long-session, when the Budget and Financial Management Division of the Office of Policy and Management (OPM) develops forms and instructions for state agencies to submit their budget requests. Agencies report back to OPM in September-October of even numbered years. In odd numbered years adjustments and revisions are submitted if necessary. OPM reviews the requests and prepares their recommendations based on their analysis of the efficiency and effectiveness of existing programs, and the perceived public need for new and expanded programs. When there is a newly elected Governor, which we will see in November, the Secretary of OPM will send the Department’s tentative recommendations to the Governor-elect by November 15thfor review. The Governor-elect may hold budget hearings with such agencies as desired, or at the request of any agency. Final policy decisions are then incorporated in the recommended budget (December-January). The Governor transmits the budget document for the next biennium to the legislature by the first session day following the third of February in each odd numbered year. In even numbered years, the Governor will transmit a report on the status of the budget enacted, along with any recommendations for revisions and adjustments if needed. In the case of deficit, the Governor must submit to the legislature a deficit mitigation plan within 30 days of the certification of a deficit greater than one percent of general fund expenditures.
The Legislative Branch
Once the legislature has received the Governor’s recommendations, their process begins. The Appropriations and Finance Committees meet to review the Governor’s recommendations. The Appropriations Committee holds public hearings on each agency’s budget over the course of two weeks. The Committee simultaneously divides its members in to sub-committees, which hold work sessions to review agency operating budgets with staff from the agency, OPM, and the legislature’s Office of Fiscal Analysis (OFA).
The Finance, Revenue, and Bonding Committee does the same in its review of revenue and capital projects (bonding). The sub-committees, with the assistance of OFA staff, develop recommendations for presentation to the Committee through its chairpersons. These recommendations are refined and reviewed with leadership. In recent years, the General Assembly has considered consolidating these processes by combining the two committees and created something similar to the U.S. House of Representatives’ Ways and Means Committee.
After the committees finish their respective public hearings, the sub-committees report to leadership, and leadership refines their recommendations for committee votes. This can happen anytime between February and April, before the Committees’ JF (Joint Favorable) Deadlines. The Finance and Appropriations Committees have the latest deadlines of all the legislative committees.
Assuming both fiscal committees vote favorably on the budget and revenue proposals (which doesn’t always happen), the budget moves on to the floor for final action by the House and Senate. When the budget moves out of committee, it goes forward as two separate bills. One for revenue and one for spending, in addition to a variety of implementer bills for each of the agencies. On the floor, the budget and its related bills are susceptible to amendments as with any other piece of legislation. Once they are voted on favorably by both chambers, they go to the Governor for his signature or veto.
The legislature appropriates funds to the agencies for the biennium beginning the following July 1 in its odd-numbered-year session, primarily in one bill. In even-numbered years, at least one bill which adjusts expenditures for the ensuing fiscal year must be reported. The bill is required to contain legislative revenue estimates. By law (both constitutional and statutory), the level of appropriation cannot exceed revenue estimates. Bonds are authorized for state facilities through a main bond bill. Two other significant bond bills are passed: one for various continuing statutory programs such as school construction, housing and pollution control grants, and one for transportation purposes. In addition to the Appropriations Act, there may be other individual bills authorizing the expenditure of funds (although these are not usually significant), as well as several bills relating to revenue measures (tax changes as well as various fees and fines).
In even-numbered years, or short sessions, the process is the same. However, in that case all budgetary action is revision to the budget enacted in the year prior. Agencies submit requests to OPM in the fall, the Governor presents their recommendations to the legislature in February, the fiscal committees hold public hearings and convene sub-committee workgroups, the fiscal committees take action, the budget moves to the floor for further action and then to the Governor for final approval.
We’ve included diagrams to help illustrate the budgetary process in both long and short sessions. But the budget always follows this general path: Governor’s Recommendations àLegislative Fiscal Committees àHouse & Senate àGovernor’s Signature.
OFA and OPM publish budget summaries and updates throughout the year on their websites. These reports include general fund projections, agency deficiencies, and revenue projections. Both offices are good sources for tracking the budgetary process. As with all legislative proposals, the budget is susceptible to political influences, and the makeup of the legislature can influence (sometimes heavily) the process. But these statutory and constitutional guidelines can help us predict – if not how – at least when these various components will occur.