How Does the Budget Process Work?

Every two years, the state budget is re-created. Right now decisions are being made inColumbus for the next biennium budget, meaning the budget will be planned for the next two fiscal years. So fiscal year 2007 will end June 30, 2007, and fiscal year 2008 will begin on July 1 of 2007. The process of creating a new biennium state budget has many steps. Here are the basics:

1. The process starts in July of even-numbered years. The Office of Budget and Management (a state office known as OBM) begins by corresponding with state agencies to see how much each agency requests for their own budget.

2. OBM works with the Governor and the Governor’s staff to create an Executive Budget.

3. The Governor presents the Executive Budget first to the Ohio House of Representatives and it is introduced by the Speaker of the House in the form of a bill. This happens early in January or February of every odd-numbered year. The Ohio House of Representatives is made up of elected State Representatives.

4. The House of Representatives reviews the budget. Specifically the Finance Committee of the House of Representatives and its subcommittees hold hearings on the budget. During those hearings the public can express their views and opinions. The committee members discuss the Executive Budget and they can draft changes to it in the form of amendments. Then they present their changes to the rest of the House.

5. The full House then votes on the budget bill. Other legislators have an opportunity to propose amendments before the final vote called floor amendments (because they are made from the “floor” of the House).  Each amendment must be passed separately.  It is possible to pass the budget and only some (or none or all) of the amendments proposed to it.

6. Once the House version of the budget is approved, with any added amendments, it is passed on to the Senate.  In the Senate, made up of elected State Senators, the budget review follows basically the same steps. Neither the House nor the Senate has to make changes to the Executive Budget, but based on the process of public testimony and feedback from various members of the public (like a Rally in front of the Statehouse), they make changes.

7. Once the budget passes through the House and the Senate, the whole budget bill (along with all the approved amendments) goes to Conference Committee (where representatives from both the House and the Senate debate the bill and try to come to an agreement). The Conference Committee then prepares a report to present to the House and Senate.

8. If both the House and the Senate agree to the Conference Committee report, the bill then needs to be reviewed by executive agencies and the Governor. Once the Governor signs the budget bill, it becomes a law immediately. The Governor does have the power to veto (disapprove) the budget if he chooses to.

Right now, Ohio is facing deficits in its budget. The solution to achieve a balanced budget is either to decrease spending or raise revenue. In Governor Strickland’s Executive Budget, there are some revenue-enhancements, and many cuts to spending. Revenue-enhancements usually happen in the form of taxes. Many people that do not want to see cuts in spending encourage raising taxes in a fair way as the solution to get necessary funding for services and programs.