History of the Legislative Budget Board
The Legislative Budget Board (LBB) was created in 1949 by Senate Bill 387 passed by the Legislature that same year. The impetus for the creation of the LBB was twofold: higher state government expenditures after the end of World War II; and a recommendation from the State Auditor’s office for the creation of a legislative committee for the continuous review of state spending. The legislation required all state agencies to submit their budget requests to the LBB for review and recommendations.
Prior to the creation of the LBB, budgeting was assigned to the Board of Control, which was the state’s purchasing agent. However, the Board of Control had no authority to refuse requisitions or to make periodic adjustments in budgetary expenditures for state agencies.
KEY BUDGET PROVISIONS THROUGH THE YEARS
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Article III, Section 49a (adopted in 1943), requires that the Comptroller of Public Accounts submit to the Governor and the Legislature an itemized estimate of revenue that will be available for expenditure during the forthcoming biennium. Appropriations in excess of anticipated revenue may not be made except by a four-fifths vote of each house. This provision is known as the "pay-as-you-go" spending limitation.
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or resolution that would authorize or require the expenditure of state funds for any purpose other than those provided for in the General Appropriations Act. Since 1977, the rules of both the House and the Senate have further required fiscal notes on bills that would have statewide impact on units of local government. In 1987, the Legislature began requiring that a criminal justice policy impact statement also be included in fiscal notes; in 1990, the Legislature added the requirement for equalized education funding impact statements. In 1993, the Legislature directed the LBB to provide tax equity notes.
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Included in this amendment was a section limiting the growth of appropriations from certain revenues to the estimated rate of growth of the state's economy. In 1979, the Legislature made the LBB responsible for determining the information necessary to establish this constitutional limit on appropriations. This provision is known as the limitation on growth in appropriations.
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authorizing the Legislature to require prior approval for the expenditure of funds by an agency or the transfer of appropriated funds beyond current authorization. The implementing legislation for this process, referred to as budget-execution authority, was amended in 1991. Between legislative sessions, the Governor or the LBB may propose (1) to prohibit a state agency from spending all or any part of an appropriation made to the agency; (2) to transfer an appropriation to another state agency; or (3) to change the purpose for which an appropriation was made. The LBB must approve and/or amend a Governor's proposal, or the Governor must approve and/or amend an LBB proposal.
BUDGETING SYSTEMS IN TEXAS
Texas has integrated a variety of budgeting concepts to fund state operations. For almost 20 years (1973–1991), budgeting in Texas was based on the concept of zero-based budgeting. In September 1973, legislative leaders approved a preliminary design for the implementation of a zero-based, program budgeting system to begin in the 1976–1977 biennium.
In 1991 the state initiated a comprehensive process of strategic planning for all agencies within the executive branch of state government. House Bill 2009, enacted in 1991, authorized a six-year strategic planning process (later amended to a five-year planning horizon). Strategic planning is a long-term and future-oriented process of assessment, goal setting, and decision making. It includes a multiyear view of objectives and strategies for the accomplishment of agency goals. Clearly defined results provide feedback that influences future planning, resource allocation, and operating decisions.
Since 1992, strategic planning has been the first step in the state’s Strategic Planning and Performance Budgeting System. This system was designed to integrate the strategic planning process with performance-based budgeting and structured to recognize the relationships between funding and performance. An agency’s strategic plan is often used as a starting point for developing the agency’s budget structure, (i.e., goals, strategies, measures, measure definitions, and other items of appropriation).
ADDITIONAL BUDGET ANALYSIS
Beginning with the 2014-15 biennial budget the LBB began providing program-level detail on state appropriations. Programs are subsets of one or more strategies in the state budget. Through the State Budget by Program portal, the LBB provides online access detailing the funding amounts for programs throughout the state budget along with the methods of finance for the programs as well as any related statutory authority.
The LBB also conducts Strategic Fiscal Reviews (SFRs) on state agency programs. SFRs were first instituted in preparation for the 2016-17 biennium. The SFR provides an in-depth analysis of the selected state agency programs and their relationships to the agencies’ core missions and statutes. SFRs aid lawmakers in budget and policy deliberations.