Budget and Fiscal Section

The Budget and Fiscal Section of LSO staffs the Joint Appropriations Committee (JAC) and shepherds the budget bill through the entire legislative process. The section provides a variety of "number crunching" functions and staff support to other legislative committees and individual legislators that need fiscal analysis. Other responsibilities include providing fiscal notes for proposed legislation each session, serving on the Consensus Revenue Estimating Group (CREG) to provide the official revenue estimates for the state, and generally keeping track of all developments affecting the state’s budget or revenue picture. The sections below provide a brief explanation of the fiscal services available to legislators from this section.

Budget Analysis

Once we receive the Governor’s budget recommendations in December, we analyze the budget request and compile detailed reports to help JAC review the agency requests. We also prepare summary reports of the total budget request and forecasted revenues to give the Committee an idea of the "big picture." JAC begins its biennial budget hearings in December or early January prior to the budget session. During a general session, agency supplemental budget hearings are held during the session at JAC meetings. We staff the Committee during these hearings and during the Committee’s work sessions to develop legislative budget recommendations. Once the Committee has completed its recommendations for the budget bill, we prepare two identical appropriations bills for introduction in each house. During the session, we spend most of our time drafting amendments to the budget bill and conducting fiscal analysis on other legislation.

Fiscal Note Processing

We are responsible for preparing a fiscal analysis of each bill that has potential significant fiscal effect on the state budget or a state agency. If we determine a bill has a fiscal impact, we will not send out sponsor and cosponsor approval forms to legislators until the fiscal note is complete. We do not prepare fiscal notes for all legislation that has a potential fiscal impact. Often the fiscal impact of proposed legislation is indeterminable, without extensive study of the issue. Further, bills received late in the drafting process may not receive a fiscal note due to time constraints.

Revenue Estimating

The LSO Budget and Fiscal Manager serves as a co-chair of the Consensus Revenue Estimating Group (CREG). This group is represented by staff from the legislative and executive branches of government and is responsible for formulating projections of the main sources of income to the major accounts in the state. CREG meets annually in October to forecast the revenue for the state. After the projections are completed, we compile this information into the CREG Report with the assistance of the Economic Analysis Division at the Department of Administration and Information. The Governor and the Legislature use this forecast as the official revenue estimates for preparing and adopting state agency budgets. If necessary, we revise the CREG forecasts in January.

Revenue and Expenditure Projections

In addition to the semi-annual CREG revenue forecast report, we also prepare a revenue monitoring report in April and July. This report provides an update on the current year-to-date actual revenue receipts compared to the expected level of revenue for the current fiscal year. We periodically publish a report known as the "Goldenrod" Report, which presents a fiscal summary for selected expendable funds and accounts. We update the profiles several times during the session as appropriations and transfers are made and we update it at other times of the year as expected revenues and expenditures change. We also provide fiscal analysis to the Revenue Committee during the session and during the interim. We provide projections for different types of revenue enhancement options, we estimate the effects of changing distribution formulas for existing revenue streams, and we determine the state’s overall revenue needs.

School Finance Fiscal Analysis

K-12 school finance issues have become an important factor in the overall state budget picture in the last several years, because of the 1995 Supreme Court decision related to K-12 school finance. As a result, the Budget and Fiscal Section has become more and more involved in assisting the LSO Legal Services Division and the School Finance Section with staffing the Joint Education Committee and performing other tasks related to school funding. We provide and update school foundation program (K-12) revenues and expenditures and estimate the fiscal impact of various K-12 funding proposals put forth by legislators and committees.

Fiscal Research Requests

In addition to the services mentioned above, we also conduct general fiscal analysis for individual legislators and other committees. During the session, most of our time is dedicated to analyzing issues surrounding pending legislation and we spend most of our time on budget, K-12 funding, and revenue issues. As time permits, we are also available to individual legislators to answer questions, draft amendments, and provide research and analysis on these or other fiscal matters. Computer resources of the LSO enable us to provide numerous types of tables, charts, graphs, and overhead projection material in response to committee and legislator’s requests. Questions regarding current or historical appropriations for any state-funded agencies or programs, questions on potential revenue enhancement options, actual expenditures for various programs, and questions about funding and revenue distributions are examples of the types of request for information legislators request from this section.