The Governor’s Proposal

The process of developing and approving a new state budget formally begins in early February, when the governor proposes a revenue and spending blueprint for the following fiscal year -- (except in years when a new governor is inaugurated in January, when the budget presentation moves back a month to early March.)

Usually, the governor addresses a joint session of the Legislature, reporting on the financial condition of the commonwealth and describing his proposals. He submits a document that outlines in detail the projected cost of operating all state agencies and programs, as well as a complete list of proposed reductions or increases in every line item of the budget.

He also projects the amount of taxes and other revenues that he expects the state to receive in the next fiscal year.

Attention usually focuses mainly on the General Fund, where most personal and business taxes are deposited, and from which money for most state programs is appropriated. The governor also budgets other funds, however, such as the Motor License Fund, the Lottery Fund, the Gaming Fund, etc.

At this stage, the Governor’s budget is an elaborate suggestion. The House and Senate must write, debate, and approve the final budget in the form of legislation, and send it to the governor to be signed.

Budget Hearings

Several weeks after the Governor offers his budget proposal, the legislature begins to gather input to decide what changes it will try to make to the governor’s plan. The House and Senate Appropriations Committees, separately, conduct hearings. Cabinet secretaries from each of the departments of state government, several of the governor’s executive staff such as his budget secretary, and leaders of some other state agencies appear to discuss their budget requests.

Members of the Appropriations Committees have an opportunity to question the agency heads. Depending on the size and complexity of the department, each hearing may last anywhere from an hour or two, to an entire day.

In a typical year, the budget hearings conclude by early March.

Public Input

In addition to the information they elicit from the administration during budget hearings, legislators receive a considerable amount of feedback on the budget proposal from a wide variety of sources between the time the governor makes his proposal in February and the beginning of the new fiscal year on July 1.

Frequently, ordinary citizens call or write to their Senator or Representative about tax issues or spending priorities, based on what they have learned about the governor’s budget proposal from the news media or other sources.

Legislators also hear from lobbyists and members of advocacy groups who are interested in particular causes.  These groups often visit legislative offices or write letters. They sometimes furnish legislators with written analysis, surveys or studies. Occasionally, they also stage rallies or demonstrations in Harrisburg.

The state Capitol building is at its busiest from February through June.

Negotiations

As June draws closer, legislative leaders, their key staff members, and representatives of the governor’s office meet frequently about the budget.

The meetings have a variety of formats. Sometimes Senate or House Majority and Minority Leaders and Appropriations Committee chairmen from both parties meet together. Sometimes staff members of the four caucuses meet to discuss various financial scenarios and analyze a wide range of budget numbers, then report back to the elected leaders.

After these preliminary meetings and with sufficient groundwork laid, the legislative leaders meet with representatives of the governor to negotiate changes to the proposed budget. These series of back and forth meetings may continue for several months.

Throughout the process, legislative leaders are attempting to reflect the wishes of the majority of the members of their caucus concerning the content of the budget, keeping in mind the impact it will have on their constituencies back home in the districts, as well as the impact on the entire state. Legislative leaders periodically brief the rank and file members on the progress of the negotiations.

Enactment

Through a process of compromise, negotiators from the legislative and executive branches arrive at a version of the budget that will receive the support of a majority of the members of the House and Senate, and is sufficiently acceptable to the governor.

The House and the Senate must each pass the general appropriations bill, some smaller appropriations bills, and a number of other pieces of accompanying legislation that embody statutory changes that are necessary to implement what is contained in the budget. (For example, a bill amending the School Code is usually needed to reflect programmatic or funding changes in education.)

When the budget and accompanying bills pass the House and Senate,  they go to the governor for his signature.
 

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