CALIFORNIA'S BUDGET PROCESS

The following sections summarize the major steps and procedures of California's budget process.

Budget Development
The State Constitution requires that the Governor submit a budget to the Legislature by January 10. It provides for a balanced budget in that, if the proposed expenditures for the budget year exceed estimated revenues, the Governor is required to recommend the sources for the additional funding. 

The Department of Finance coordinates the printing of the following publications, which comprise the Governor's Budget package. They are available from the Department of Finance Website.

Governor's Budget Summary- ¾A summary volume which includes the Governor's goals and objectives for the forthcoming year, and the policy perspectives and highlights of changes in the Governor’s Budget.

Governor's Budget- ¾A detailed presentation for each department for the past, current, and budget years.

Governor's Budget Highlights- ¾A pocket size highlights book of narrative, charts and graphs issued on the Press Conference day.

Salaries and Wages Supplement- ¾A detailed presentation of authorized staffing and related salaries. The Governor annually presents the budget at a formal press conference. The Governor's State of the State address typically includes a general presentation of the Administration’s budget policies and priorities.

Budget Enactment
By constitutional requirement, the Governor's Budget must be accompanied by a Budget Bill itemizing recommended expenditures, which shall be introduced in each house of the Legislature. The Constitution also requires that the Legislature pass the bill by June 15.  The Senate Budget and Fiscal Review Committee and the Assembly Budget Committee are the two committees that hear the Budget Bills. They assign the items in the bill to several subcommittees, which conduct budget hearings. These hearings generally begin in late February soon after the Legislative Analyst issues the "Analysis of the Budget Bill".  When the Budget Bill receives a two-thirds vote of each house, it is passed on to the Governor. The Constitution allows the Governor to reduce or eliminate an item of appropriation.

The Department of Finance publishes three documents upon enactment of the Budget Act. The first two are also available from the Department of Finance Website.

California State Budget Highlights- ¾A pocket size highlight book of narrative, charts and graphs.

Final Budget Summary- ¾This document is an annotated version of the Budget Act, which includes summary tables, technical corrections to the Budget Act, and the effect of vetoes on the items and sections of the Budget Act.

Final Change Book- ¾This document provides the detail of changes between the January 10 budget and the enacted budget. There are generally budget changes proposed by the Governor or the Legislature, which necessitate changes to existing law in order to implement the budget changes. If this is the case, separate bills are introduced to implement the change. These budget implementation bills are called "trailer bills" and are heard concurrently with the Budget Bill. By law, all proposed statutory changes necessary to implement the Governor’s Budget are due to the Legislature by February 1.

Administration
The Budget Act is the primary source for appropriations. Continuous statutory appropriations and special legislation also provide expenditure authority. Departments have the primary responsibility to operate within budgeted levels and to comply with any restrictions or limitations enacted by the Legislature. Further, the general expectation is that State agencies comply with the legislative intent. Although the general expectation is to conform to the enacted budget, the Legislature has recognized a need to establish some flexibility to adjust budgets.