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Ohio Budget Process
The information in this section is a summary of the Ohio budget process. For complete details, download the Guidebook for Ohio Legislators from the Ohio Legislative Commission's Web site. Chapter 8 covers the Ohio Budget Process. Other chapters provide valuable information, such as Chapter 6: Tools for Understanding a Bill.
Terms to Know
- Appropriation bill
- A measure before a legislative body authorizing the way public moneys can be spent and stipulating the amount, manner, and purpose of the various items to spend money on.
- A two-year period; the period for which appropriations are made in the State legislature.
- Biennial session
- The regular session of the State legislature, held in odd-numbered years.
- Enactment of a Bill
- When a bill becomes a law.
- Executive Budget
- All recommended appropriations are published and presented by the Governor in the Executive Budget.
- General Assembly
- The legislature; the law-making branch of the government.
- General Revenue Fund
- Fund from which all lawful obligations of the State are payable through when the payment is not designated (appropriated) to come from a special fund.
Background of the Ohio Budget Process
The State budget is created through the enactment of several separate bills (see How a Bill Becomes a Law in Ohio) through collaboration among state agencies, the Ohio Office of Budget Management, the Governor, and the Legislature. By creating this budget, the General Assembly (the law-making branch of government) is able to distribute the State's financial resources among the many spending priorities that are presented each year. The General Assembly is required to be involved in the process according to the Ohio Constitution, primarily Article II, Section 22, which states:
"No money shall be drawn from the state treasury, except in pursuance of a specific appropriation, made by law; and no appropriation shall be made for a longer period than two years."
The State budget is normally in effect for two fiscal years, beginning July 1 through June 30 of the following year. For the legislature, work on the budget occurs during the first six months of the first regular session of the General Assembly. This work involves the introduction, hearings, and enactment, before June 30 of that same year, of:
- The main operating appropriations bill, which provides funding for most state agencies;
- The education appropriations bill for the Department of Education, and other education related agencies;
- The transportation appropriations bill for programs funded with motor vehicle fuel taxes and registration fees (primarily in the Departments of Transportation and Public Safety);
- Appropriations bills for the Bureau of Workers' Compensation and the Industrial Commission.
In the second regular session of the General Assembly, two other appropriations bills are enacted:
- The capital improvements bill, which appropriates money for projects for the acquisition, construction, equipment, or renovation of buildings that were not included in the transportation appropriations bill;
- The capital reappropriations bill, which reappropriates any amounts of the original appropriations for projects that have not yet been completed, such as in construction projects that take longer to complete than the two-year life of an appropriation.
Steps of the Ohio Budget Process
Step 1: Budget Requests
The process begins in July of an even-numbered year. The Office of Budget and Management (OBM) initiates the process by sending detailed instructions on the process that agencies need to follow in preparing their budget requests. These instructions are send to agencies designated to receive appropriated funds. The agencies submit their requests to OBM from late August to early November.
Step 2: Requests Reviewed
Once the budget request is received, OBM reviews the request and holds meetings and budget hearings with the agency as needed.
Step 3: Preliminary Recommendations
OBM works with the Governor and the Governor's staff to come up with preliminary budget recommendations. The recommendations are shared with the agencies and may be appealed by the agencies to the Governor.
Step 4: The Executive Budget
All recommended appropriations are published in the Executive Budget. Included in the Executive Budget is a report on "tax expenditures," which is revenue not available to the General Revenue Fund (fund from which all lawful obligations of a state are payable in the absence of a provision calling for payment from a special fund) because of deductions, exemptions, and credits in tax laws. The Department of Taxation prepares this part of the report.
Step 5: Governor Presents the Executive Budget
The Governor must present the Executive Budget to the General Assembly within four weeks after its organization early in January of every odd-numbered year. In the years in which a new Governor takes office, the report can be presented as late as March 15.
Step 6: From Budget to Bill
The Legislative Service Commission drafts the Governor's proposed budget in the form of legislation (bills). The Chairperson of the Committee on Finance and Appropriations normally introduces the bills in the House of Representatives.
Step 7: Committee Hearings and Revisions
House committee hearings are conducted by the full Finance Committee and by its standing subcommittees. Substitute bills are drafted with changes recommended by the subcommittees. The substitute bills are then considered and amended by the full committee, reported, and sent to the House floor for third consideration.
Step 8: Onward to the Senate
Once the House passes the bills, they are introduced in the Senate where a similar procedure is followed as when the bills were in the House.
Step 9: Conference Committees
Education and main operating appropriations bills are normally sent to committees of conference. Conference committee hearings usually take place over a period of at least two weeks. For each of the bills, the conference committees prepare a committee report to submit to the House and Senate.
Step 10: From Bill to Act
Once both houses agree to the conference committee report, the bill is put into "act" form and is reviewed by the appropriate executive agencies and signed by the Governor. Even if the Governor signs the act, he can still veto (disapprove) any particular item in an act making an appropriation. When the Governor signs an act, it is then put into law immediately.
The Budget Process Calendar
|January||The Governor outlines the budget proposals during the State of the State Address.|
|February||The Governor releases summaries of the Executive budget proposal to the General Assembly and the public. The proposal is then introduced as an Executive Budget bill in the Ohio House of Representatives.|
|February - March||The House holds hearings, makes amendments, and passes its version of the bill.|
|April - May||The House version of the budget is introduced in the Senate. The Senate hold hearings, makes amendments, and passes its version of the bill.|
|June||A Conference Committee reconciles differences in the House and Senate version of the bill. The Governor may sign, veto, or sign it with line-item vetos. Vetoes are sent back to the House and Senate. A three-fifths majority of both the House and Senate is required to override a veto.|
|July||The new Operating Budget begins on July 1.|