As the oppressive Texas heat of August rolls in, Austin is quiet as legislators and their staffs attend legislative conferences in cooler locations and other capitol denizens take that last summer vacation before school starts. Absent any breaking news, the Mignon Memo will focus on frequently asked questions this month to provide some general background information as we begin preparations for the 82nd Legislative Session.
What do the acronyms “LBB” and “LAR” mean? Why are they important?
As agencies begin to develop their Legislative Appropriations Requests (LARs) for the 2012-2013 biennium, it is a good time to focus on the Legislative Budget Board (LBB). The LBB is a permanent joint committee of the House and Senate that assists the Texas Legislature with fiscal matters. It creates fiscal analyses for proposed legislation, develops budget and policy recommendations for state agencies, and conducts performance reviews of state agencies to improve efficiency. The Lieutenant Governor and the Speaker of the House serve as joint chairs of the LBB. The Chairs of the Senate Finance Committee, the House Appropriations Committee and the House Ways and Means Committee are automatic members. The Lieutenant Governor then appoints three Senate members and the Speaker appoints two House members. The LBB has been led by five directors since its creation with John S. O’Brien currently directing the agency.
The LBB was created in 1949 to address the escalating state government expenditures after the end of World War II; and to satisfy a recommendation from the State Auditor’s Office for the creation of a legislative committee for the continuous review of state spending. All state agencies were required to submit their budget requests to the LBB for review and recommendations. In 1973, the LBB’s duties were expanded to include evaluation of agency programs and estimation of the probable costs of implementing legislation introduced in the legislative session. Fiscal notes become even more critical in years of tight budgeting. A high fiscal note often kills a bill before the merits are debated.
Each agency’s appropriation request provides a fiscal expression of the agency’s strategic priorities. This fiscal expression includes quantitative information such as projected performance, projected cost, and methods of financing proposed for state services. In addition to numerical figures, information is also provided in the form of narrative language or “riders”. Each LAR is divided into two components: the “baseline” or “base level” request; and requests for consideration of “exceptional items,” which are desired services in addition to the baseline request. As a starting point for budget deliberations for the upcoming biennium, an agency’s baseline request for general revenue related (GR and GR-Dedicated) funds may not exceed the sum of amounts expended in fiscal year 2010 and budgeted in fiscal year 2011 adjusted to reflect the full five percent reduction target identified by the LBB for each agency. Agencies must also submit a supplemental schedule detailing how they would reduce the baseline request by an additional 10 percent (in five percent increments) in general revenue-related funding. The House Appropriations Committee and Senate Finance Committee will start reviewing these LARs this fall.
Still curious? Then follow this link to the LBB’s website where you can access the current state budget as a publication entitled Budget 101: A Guide to the Budget Process in Texas: http://www.lbb.state.tx.us/