Glossary of state budget terms
Revision as of 14:18, 26 June 2014 by Karen Danford
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- Allotment: Part of an appropriation that may be expended or encumbered during a given period.
- Base: The base is the component of a budget request or recommendation which reflects previous fiscal year appropriations. It may include inflation for an agency’s ongoing programs.
- Bond Rating: A judgment of credit quality based on detailed analysis of specific data given to a state by a rating agency such as Moody’s Investors Service, Standard and Poor’s Corporation, and Fitch’s Investors Service. Factors that are evaluated in determining bond ratings include a state’s ability to raise taxes, sovereignty, and the relative size and diversity of a state’s economic base.
- Budget: A budget is a plan for the expenditure of funds to support an agency, program, or project.
- Capital Budget: The capital budget is the budget associated with acquisition or construction of major capital items, including land, buildings, structures, and equipment. Funds for these projects are usually appropriated from surpluses, earmarked revenues, or from bond sales.
- Consensus Forecast: A revenue projection developed in agreement through an official forecasting group representing both the executive and legislative branches.
- Contingency Fund: A fund set apart to provide for unforeseen expenditures or for anticipated purposes of uncertain amounts.
- Current Services: Current services is a budget recommendation or request that encompasses the base budget plus allowances for addressing demand such as caseload growth or phased‐in statutory responsibilities.
- Debt Management: Negotiate and manage issuance of bonds and refunding.
- Earmarked Revenues: Earmarked revenues are the designation of certain sources of revenue for support of specific programs or agencies by statutory or constitutional provision.
- Economic Analysis: Analysis of the national and state economy to develop predictions on level of state business activity and personal income.
- Expansion/Program Change: Expansion or program change is the component of a budget request or recommendation which includes programs or purposes not previously funded by the legislature (for example, new programs, additional positions, or expansion of existing programs beyond the scope for which they were initially authorized).
- FY: Fiscal Year. Refers to the state fiscal year. The number following FY is the year the fiscal year ends.
- GF: General Fund. General fund refers to revenues accruing to the state from taxes, fees, interest earnings, and other sources which can be used for the general operation of state government. General fund revenues are not specifically required in statute or in the constitution to support particular programs or agencies.
- Incremental Budgeting: An approach to budgeting that requires that only additions or deletions to current budgeted expenditures be explained and justified. Funding decisions are made on the margin, based on the justification for the increased costs of operating agencies or programs. This process can be used in conjunction with either line‐item budgeting and/or program budgeting.
- Indirect Measures: Type of performance measure that relies on indirect analysis such as the amount of highway construction dollars available.
- Item Veto: Veto power that allows the governor to reject particular items in a piece of legislation such as a sentence, paragraph, or part of a sentence.
- Legislative Review: Review bills introduced into the legislature to inform the governor’s office of program impact, compliance with policy, etc.
- Line Item Budgeting: Line‐item budgeting refers to objects or lines of expenditures (for example, personnel, supplies, contractual services, capital outlay) that are the focus of development, analysis, authorization and control of the budget.
- Line Item Veto: A provision that allows a governor to veto components of the legislative budget on a line‐byline basis.
- Lump Sum Appropriations: Made for a state purpose, or for a named department, without specifying further the amounts that may be spent for particular objects of expenditure. An example is an appropriation for the corrections department that does not specify the amounts to be spent for salaries and wages, travel, equipment, and so forth.
- Mandate: A law, policy, program or provision that is passed by one level of government but applies to another level.
- Nonrecurring/One‐Time Appropriation: An appropriation made for one‐time items or projects. Examples include capital or major equipment purchases, special studies, and information technology upgrades.
- Object Classification: Analysis of obligations and expenditures according to the types of services, articles, or other items involved, e.g., personal services, supplies, materials, or equipment, as distinguished from the purpose for which such obligations are incurred.
- Ongoing Appropriation: This type of appropriation is made for ongoing programs for which future appropriations will have to be made.
- Operating Budget: The budget established for operation of a state agency or program, typically based on legislative appropriation.
- Organizational Unit: A budget format that assigns expenditures by department level, without specification as to what the funding level is for specific programs.
- Organization and Management Analysis: Studies and assistance to agencies on organization procedures and systems.
- Outcome Measures: Outcome measures are tools or indicators to assess the actual impact of an agency’s actions. An outcome measure is a means for qualified comparison between the actual result and the intended result.
- Output: An output is the good or service produced by an agency.
- Performance Budgeting: Performance budgeting is similar to program budgeting. Performance budgets are constructed by program but focus on program goals and objectives; measured by short‐term outputs, projected longer term outcomes, and cost/benefits analysis. Appropriations are not only linked with programs, but also with expected results specified by these performance criteria.
- Program Budget: Program budgeting refers to budgets that are formulated and appropriations that are made on the basis of expected results of services to be carried out by programs. The focus on outcomes is usually over multiple years. The budget material is arranged in such a way as to aid the executive and legislature in understanding the broader policy implications of their decisions.
- Program Evaluation: Preparation of reports with detailed analytical back up to determine to what degree programs are effective and are accomplishing their objectives. Emphasis is on analyzing proposed activities.
- Relational Measures: Type of performance measure that uses comparisons to other states. For example, reduced transportation costs, relative to other states.
- Revenue Estimating: The process used by a state to project available revenues for the support of operating costs and capital outlays in the current and future fiscal years.
- Structural Deficit: Structural deficits occur when growth in spending needed to maintain current services and growth in revenues from current taxes and other revenue sources are inconsistent.
- Supplemental Appropriation: A supplemental appropriation is an appropriation made to an agency or program during the current operating fiscal year to cover unforeseen events, projected over expenditures, or to replace revenue shortfalls.
- Tax Expenditure: Revenue foregone because of special tax exemptions, deductions, exclusions, credits, preferential tax rates, or deferrals.
- Trust Funds: Amounts received or appropriated and held in trust in accordance with an agreement or legislative act which may be expended only in accordance with the terms of such trusts or act.
- Zero‐Based Budgeting: Zero‐based budgeting subjects all programs, activities and expenditures to justification (in contrast to incremental budgeting). Funding requests, recommendations and allocations for existing and new programs are usually ranked in priority order on the basis of alternative service levels, which are lower, equal to and higher than current levels. This process can be used in conjunction with either line‐item budgeting and/or program budgeting.