Guide To Understanding The State Budget Process

The Florida Constitution requires the Florida Legislature to develop and pass a balanced state budget each year. Indeed, this is the ONLY bill that Legislators are required to pass each year. Unlike the federal budget, the state budget – formally known as the General Appropriations Act (GAA) – must be balanced

While it may seem like all the of the budget development works occurs during the Legislative Session, this is actually a year-round project that involves several steps.

State process for the General Appropriations Act

Agency Instructions

In July of each year, the governor and legislative leadership provide written instructions to state agencies to develop their budget requests. These guidelines may request that some or all state agencies submit budget requests reflecting a specific budget reduction percentage.

Revenue Projections

In August and September, a Long-Range Financial Outlook (LRFO) Report must be developed that compares projections of state revenue with the cost of major programs in the annual budget. State law dictates that the report provide a three-year picture of Florida’s fiscal strategy. Much of the work to develop the report is carried out by the Office of Economic and Demographic Research (EDR).

Budget Requests

During October through January, state agencies and the judicial branch use the Long-Range Financial Outlook to shape their annual Legislative Budget Requests (LBRs) that provide a breakdown of the amount of money each agency needs to perform the functions authorized and required by law. LBRs are due from each agency by October 15 of each year.

Governor’s Budget Recommendation

The governor uses the LBRs to make a budget recommendation. State law requires the governor to submit the budget recommendation at least 30 days before the beginning of the legislative session. In accordance with Article III, Section 3 of the Florida Constitution, the legislative session convenes on the first Tuesday after the first Monday in March of each odd-numbered year, and on the second Tuesday after the first Monday in January of each even-numbered year. As a result, in even-numbered years, the governor’s budget recommendation must be released no later than December and, in odd-numbered years, no later than February.

Legislature Passes the General Appropriations Act (GAA)

The Florida House and Senate craft what will become the state’s budget during the legislative session. Using revised figures provided by a conference of state economists and information gathered during appropriations committee meetings, the House and Senate each pass their version of a state budget bill. Next, legislative leadership decides how much funding each subject area — such as education – will be allocated. Once allocations are announced, the budget conference negotiations between the House and Senate begin until they reach final agreement. The final negotiated budget bill is called the General Appropriations Act.

Governor’s Line Item Veto Actions and Signature

After the legislative session adjourns, the budget is delivered to the governor for review and approval. The governor has 15 days from the date he/she received the budget to sign the budget bill and exercise line-item vetoes, which work to cancel specific funding allocations. A two-thirds majority vote is needed to overturn any budget item vetoed by the governor.