Building the budget.

• Author: Feustel, Bruce
• Position: State budget

To a new (or not-so-new) legislator, the state budget is an arcane and mysterious process. Here's some help.

You know you've arrived as a legislator when you understand the state budget and start influencing budget decisions. When you're relatively new in your legislative career, the process for making decisions about expenditures may seem unclear and off limits. What do all the numbers really mean, and how will the money be spent? There is so much to learn it's hard to know where to start.

A few important tips can help answer your questions.

How do I start?

To learn more about the state budget and finance, go first to legislative staff and ask them to guide you and provide information. Figure out how you learn best - the information can be made available in many forms. If you would like executive summaries or charts and they're not available, ask staff to prepare them. Try first to get a general understanding of the budget and the major expenditure areas. After that, get a deeper knowledge of the areas or issues important to you.

A budget Is a budget. Right?

There are three kinds of budgeting - traditional, zero-based and performance. In traditional budgeting, you look at what you spent in the last budget cycle and use that as a starting point. The disadvantage is that base spending is not scrutinized, but it has the advantage of stability. Zero-based budgeting forces an agency to justify its existence and all spending - like starting from "ground zero" each budget cycle. Performance-based budgeting provides money together with goals to be achieved and consequences if the goals are not met. Most states are moving toward a mixture of traditional, performance-based and zero-based budgeting.

Where does the money go?

Although states spend money for thousands of purposes, the major areas are typically social services, Medicaid, K-12 education, higher ed and sharing revenues with local governments. Two of the fastest growing expenditure areas are prisons and...