ARIZONA LEGISLATIVE MANUAL – THE STATE BUDGET PROCESS
manner that attempts to equalize work loads. The budget is developed through a process that
includes public hearings, subcommittee deliberations and caucus deliberations. During the first
week of the session, the JLBC staff briefs the Appropriations Committees on the JLBC budget
recommendation. The staff also compares and contrasts its recommendation to the Governor’s
recommendations. The next step is for subcommittees to “adopt” their budget recommendations
for each agency. The subcommittee provides recommendations with regard to funding levels, the
number of authorized full-time equivalent (FTE) employee positions, footnotes containing
directions and limitations on how the money should be spent, statutory revisions and
appropriations report guidance. On completion of the subcommittee work, full committee work
and caucus deliberations, the full House and Senate will consider the general appropriations bill
with the goal of having the legislation to the Governor before the end of March.
During the legislative session, public hearings are conducted, and before July 1 the
budget is adopted by the Legislature through the passage of a general appropriations act, a capital
outlay bill and various omnibus reconciliation bills (ORBs). In certain years, the budget bills
have been considered during a special session of the Legislature to provide time for their
enactment before the beginning of the new fiscal year on July 1. The capital outlay bill is for the
purchase and construction of land and buildings. The reconciliation bills are used for statutory
adjustments that must be implemented to carry out the adopted budget. A bill to pay past claims
against the state, known as the “named claimants bill,” and numerous supplemental
appropriations bills are also considered during each regular session of the Legislature. Once
adopted, the bills are presented to the Governor for approval.
In addition to the normal options of signing or vetoing the bills or allowing them to
become law without signature, the Governor may “line-item veto” individual items of
appropriations. The Legislature may attempt to override a line-item veto in the same manner as a
normal veto override attempt.
Originally enacted in 1993, a budgetary process called “strategic program area review”
(SPAR) requires each state agency to develop plans and performance measures to support its
budget requests. The agency responsible for a program subject to SPAR initiates the process by
conducting a self-assessment of the program. This assessment answers specific questions in
various categories: background information, program funding, strategic planning, performance
measurement, performance results and other issues posed by the Legislature, the executive branch
or the agency. Agencies are required to submit their written self-assessments to the OSPB and
JLBC by September 1 of the preceding year. In the second phase, the OSPB and JLBC staffs
jointly review the agency self-assessments and gather additional information, as appropriate, to
validate agency responses. Together the two staffs prepare a draft report of their findings for
each of the programs under review. Before the legislative session begins, agencies are afforded
an opportunity to review and comment on the draft reports. The OSPB and JLBC staffs then
determine whether revisions are necessary based on the additional information provided by the
agencies. Each agency reviews the final product and prepares a formal response for inclusion in
the published reports. By law, the OSPB and JLBC staffs are required to publish a final joint
report for each SPAR by January 1. The staffs also prepare a composite SPAR document that is
provided to each legislator, the Governor and the affected agencies. In the third phase of the
SPAR process, Appropriations Committees or other standing committees hold at least one public
hearing to recommend whether to retain, eliminate or modify (REM) funding and related
statutory references for the programs.
The Joint Committee on Capital Review was established by the Legislature in 1986 and
consists of 14 members, including the chairmen of the Senate and House of Representatives
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