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The Operating Budget Process

The Operating budget process generally follows the same basic steps:
    Pre-Session Activity
  1. State agencies prepare their budgets during the late summer and fall of each year and submit them to the Governor's Office of Management and Budget (OMB) for review during a series of meetings between OMB and individual agencies.

  2. OMB checks agency requests for accuracy and format and prepares recommendations to the Governor.

  3. The Governor reviews agency requests, sets budget amounts and submits the appropriation bill and budget documents to the legislature by December 15. A copy of the December 15 draft bill is introduced via the Rules Committees prior to the State of the Budget Address. The Governor may submit budget amendments through the 30th day of the session.

    4. Session Activity
  4. The House and Senate Rules Committees introduce companion bills (HB & SB) which receive their first reading and are referred to House and Senate Finance Committees, respectively.

  5. The House and Senate Finance Committees receive the bills.

  6. The finance committees appoint subcommittees to work on each department's budget. These subcommittees submit recommendations to the full finance committees. Each finance committee finalizes the budget by department and moves a committee substitute bill (or amended version of the Governor's bill) out of committee. Though work in both houses progresses simultaneously, the House typically acts on the bill first, and then submits its version to the Senate.

  7. The bill goes to the floor of the House in second reading and can be amended at this point. The bill is then moved to third reading, voted on, and sent to the Senate.

  8. The Senate Finance Committee completes its work and sends its own committee substitute to the floor of the Senate, where it can be amended and then voted on.

  9. The Senate version is sent back to the House for concurrence. Typically, the House does not concur, but asks the Senate to recede from their amendments. The Senate usually does not recede, and a conference committee is appointed.

  10. The Conference Committee works out a compromise version of the budget and sends this version to the House and Senate floors for the final vote. No amendments are allowed to Conference Committee bills.

  11. After the bill's approval by both houses, the bill is sent to the Governor, who has 20 working days (excluding Sundays) to review the bill and exercise line item veto power, if desired.

  12. The bill becomes law and is typically effective on the first day of a fiscal year, but most appropriations bills contain sections with other effective dates.