Detailed budget process directs state expenditures

Each year, the Legislature faces a task that surpasses all others in its degree of difficulty, time consumption and veracity. On top of their various duties, the members of the House of Delegates and Senate must focus on balancing the budget. The budget process is one that affects the entire population of West Virginia and is seen as the most important piece of legislation passed each year. Surprisingly, despite the significance of the process, very few people understand it. While most citizens are aware that the budget determines what services are offered by the state, few know that it also regulates the quality of these services and the amount of taxes the people of the state must pay. The challenge of actually creating the budget begins approximately one year prior to the beginning of the affected fiscal year. The process starts with each spending unit, such as a state agency or program, estimating the funding they will need for the upcoming fiscal year. In most cases, spending units use the same amount of funds from its current fiscal year, after subtracting any one-time appropriations. Anything above the previous year’s amount must be submitted separately in an “improvement package,” which will justify the need for the additional funds. Scheduled to be received by September 1st, these requests are then reviewed by the Secretary of Administration, who holds budget hearings for the programs and agencies to discuss their estimated spending. This gives programs a chance to provide additional information, answer questions and bring any specific needs to the forefront such as legislative and federal mandates or court ordered funding. The next phase of this process passes responsibility over to the Governor who creates the Governor’s Executive Budget. Having absolute power to cut and add where he or she sees fit to address the needs and priorities of the state, the Governor also establishes the official revenue estimates of the state. The budget is developed on a cash basis, including only expected revenues and expenditures for
the fiscal year plus any surplus balances available for appropriation. The Governor is not legally required to submit a balanced budget. The West Virginia Constitution requires the proposed budget be submitted to the Legislature on the second Wednesday of January each year, except the years following gubernatorial election, at which time the budget is submitted on the second Wednesday of February. Once in the hands of the Legislature, it is given to both the House of Delegates and Senate Finance Committees for consideration. Each committee holds another series of budget hearings with each department to review their funding for the upcoming fiscal year. The committees then present a Budget Bill to each legislative body. If differences occur, a conference committee is called to work out a compromise. When an agreement is made, the bill is once again presented to both bodies for approval. The Legislature is required by the State Constitution to pass a balanced budget. To reach this standard, the estimated revenues and unappropriated fund balances must be equal to or greater than the appropriations made in the proposed budget. If this measure is not passed by a majority of the members in at least three days prior to the end of the 60 day legislative session, the Governor must extend the session for a longer period, to ensure the Budget will be ready for passage. Once passed by both bodies, the Budget Bill then becomes the Budget Act and is reported back to the Governor so he may approve, veto or disapprove and reduce items or sections. If it is approved, the Act will become a law and if not it is returned to the two legislative bodies for further consideration. The Budget Act must be approved or disapproved in five days after it is presented to the Governor. If this does not happen, the Act will become law as if it had been signed by the Governor. After the budget becomes law, the funds become available at the beginning of the new fiscal year which begins on July 1st. To receive their funding, each department is asked to submit a spending plan for three-month periods, that must be approved by the Commissioner of Finance and Administration.