Outline the major steps involved in preparing and passing the annual budget.

Question

What will be an ideal response?

Answer 1

The Department of Finance prepares the governor's version of the budget, which is sent to the legislature by January 10 as a budget bill. Once introduced as a bill, it is referred to the Assembly's and Senate's budget committees. In the meantime, the Legislative Analyst (LAO) prepares its own analysis of the governor's version. They examine the budget, piece by piece, and throughout the spring months the budget committees and subcommittees call state analysts, government officials, and citizens and lobbyists working for every imaginable interest group to testify about the governor's proposed funding levels for existing and proposed programs. During May, after actual tax receipts have been accounted for (referred to as the "May Revision" or "May Revise"), the Legislative Analyst makes final recommendations to the legislature about critical revisions. After the full budget committees finalize their work in each chamber, the leaders in the two chambers will lead negotiations to resolve their differences into a comprehensive budget bill. Legislators and their staff also enter into negotiations with the governor and (his) staff to reach compromises on every major--and many minor--points within the gigantic bill. Only a simple majority is required, so with Democrats as the majority party in both houses, the two top leaders, the Assembly speaker and the senate president pro tem (plus their staff), negotiate terms with the governor (and his staff). Thus, these "Big Three" (Democratic) leaders negotiate final versions that must be voted on by both houses; the budget bill is supposed to be passed by June 15, and legislators (are supposed to) forfeit their pay for every day the budget is not passed after that date. The governor signs the final bill into law by June 30, and the governor can make final adjustments to the bill through the line-item veto. The new fiscal year begins July 1. It might also be noted that permutations of the process occur from year to year; in some years the leaders play a bigger role, or a conference committee might take the lead.