What is the Process for Developing a State Budget?

Key Terms:

Finance:  What money do we have?

Appropriations: What should we spend it on?

Here is a summary of how the state budget is prepared:

1) The Governor's Office of State Budget and Management asks each state agency to submit expenses for the next 1-2 years

2) The Governor prepares a state budget and makes her proposal

3) The General Assembly responds to the Governor's Budget with increases, decreases, additions, or deletions

4) Both the Senate and House have "Appropriations Subcommittees" to review the details of each area of the budget (example: Education, Health and Human Services) to decide what should be spent

5) The "Finance Committee" makes recommendations on where to get the money (example: existing funds, or new income/taxes)

6) Subcommittees send their recommendations to the full Appropriations Committees for debate and discussion

7) "Budget Bill" is created with income (Finance) and expenses (Appropriations)

8) The Budget bills are discussed on the House and Senate floor (and read to group 2-3 times for comment)

9) When one "chamber" agrees on budget proposal, they send to other (example: if House started the process, they send to Senate)

10) Final Budget Bill is approved by House and Senate and signed into law

*Yesterday, (Thursday May 31) the House sent its Budget Bill to the Senate. It is now in Senate Finance and Appropriations Committees for review and discussion

North Carolina Senators and Representatives are in Raleigh for the short session of the General Assembly. Here is a brief summary of the state budget as it moves through the legislative process. More updates will follow on other bills NCCDD is following.

As always, if you have questions- please give me a call!

-Beth Stalvey

NCCDD Policy Analyst

Gov. Beverly Perdue has signed into law a measure aimed at closing a shortfall in North Carolina's Medicaid program this year. Perdue's office said the governor signed the bill on the same day the Legislature gave its final approval to the $206 million package that uses several sources to eliminate the Medicaid funding gap through June 30.

The state House approved a $20 billion budget (HB950) that includes $50 million to address housing for mentally ill and elderly residents and $250 one-time bonuses for state employees and teachers. The budget has now been sent to the Senate.

Local school districts received an addition of

more than $333 million to compensate for expiring federal stimulus money and erase $74 million in state money the schools would return to the state next year. The budget gives state employees an extra five days of vacation, but eliminates a $121 million reserve for state employee and teacher performance pay, and deducts $62.3 million from the state contribution to the retirement system. The budget includes no tax or fee increases. The budget differs significantly from Democratic Gov. Bev Perdue's $20.9 billion proposal, which included a 3/4-cent sales tax increase.

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