As the state inches closer to the next legislative session, the budget process is already underway.
The biennial budget is technically a four-year project, beginning largely with the request for and submission of agency strategic plans and legislative appropriations requests (LARs). The following year, wherein the legislature convenes, the budget is then adopted and then implemented over the next two years.
Typically, the first step in budget preparation is the development of a statewide vision, providing a framework for strategic plans, a mission for state government, core principles, and agency goals and benchmarks. This responsibility falls to the governor, in cooperation with the Legislative Budget Board (LBB).
The most recent version of the strategic vision reads:
“Texas state government must be limited, efficient, and completely accountable. It should foster opportunity and economic prosperity, focus on critical priorities, and support the creation of strong family environments for our children. The Stewards of the public trust must be men and women who administer state government in a fair, just, and responsible manner. To honor the public trust, state officials must seek new and innovative ways to meet state government priorities in a fiscally responsible manner.”
Strategic Planning and Performance Measures
At the beginning of the budget process, state statute requires each state agency to develop and submit a strategic plan, including a mission statement, goals, means to achieve said goals, population served, and measures to assess the agency’s success.
The measures developed by agencies, in conjunction with the LBB and the Governor’s Office of Budget and Policy (GOBP), track four distinct areas:
- Outcome – indicates the effect on a stated condition;
- Output – counts the services produced by an agency;
- Efficiency – gauges resource cost per unit of product; and
- Explanatory/input – provides information to help assess reported performance.
Performance measures are typically the basis for the budgeting process, informing legislators on how well an agency is doing. In addition to explaining why a measure is important, definitions of the measure should include forecasts, methods, the impact of outside factors, and the sources of information relevant to the measure.
One of the duties of the State Auditor’s Office is auditing and certifying agency performance measures. Over the course of the next two years, agencies collect data and report quarterly to LBB, GOBP and others.
During the second year, agency representatives appear before the legislature seeking funding for the next biennium. If an agency failed to meet some of its performance targets, lawmakers want to know why, possibly armed with a state auditor’s report indicating lapses in data reporting controls. These factors, and more, will determine the amount an agency is appropriated by the legislature.
In the next installment of this budget series, Texas Scorecard will look closer at the Legislative Appropriations Requests process, the key players in the development of the budget, and what opportunities exist for input by the general public. In addition, we’ll look at a small adjustment to the LAR instructions that could serve as an important move towards zero-based budgeting.
Below are key dates for the development of the 2020-2021 biennial budget.