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History of the Legislative Budget Board

The Legislative Budget Board (LBB) was created in 1949 by Senate Bill 387 passed by the Legislature that same year. The impetus for the creation of the LBB was twofold: higher state government expenditures after the end of World War II; and a recommendation from the State Auditor’s office for the creation of a legislative committee for the continuous review of state spending. The legislation required all state agencies to submit their budget requests to the LBB for review and recommendations. Prior to the creation of the LBB, budgeting was assigned to the Board of Control, which was the state’s purchasing agent. However, the Board of Control had no authority to refuse requisitions or to make periodic adjustments in budgetary expenditures for state agencies.

KEY BUDGET PROVISIONS THROUGH THE YEARS

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Article III, Section 49a (adopted in 1943), requires that the Comptroller of Public Accounts submit to the Governor and the Legislature an itemized estimate of revenue that will be available for expenditure during the forthcoming biennium. Appropriations in excess of anticipated revenue may not be made except by a four-fifths vote of each house. This provision is known as the "pay-as-you-go" spending limitation.

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or resolution that would authorize or require the expenditure of state funds for any purpose other than those provided for in the General Appropriations Act. Since 1977, the rules of both the House and the Senate have further required fiscal notes on bills that would have statewide impact on units of local government. In 1987, the Legislature began requiring that a criminal justice policy impact statement also be included in fiscal notes; in 1990, the Legislature added the requirement for equalized education funding impact statements. In 1993, the Legislature directed the LBB to provide tax equity notes.

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Included in this amendment was a section limiting the growth of appropriations from certain revenues to the estimated rate of growth of the state's economy. In 1979, the Legislature made the LBB responsible for determining the information necessary to establish this constitutional limit on appropriations. This provision is known as the limitation on growth in appropriations.

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authorizing the Legislature to require prior approval for the expenditure of funds by an agency or the transfer of appropriated funds beyond current authorization. The implementing legislation for this process, referred to as budget-execution authority, was amended in 1991. Between legislative sessions, the Governor or the LBB may propose (1) to prohibit a state agency from spending all or any part of an appropriation made to the agency; (2) to transfer an appropriation to another state agency; or (3) to change the purpose for which an appropriation was made. The LBB must approve and/or amend a Governor's proposal, or the Governor must approve and/or amend an LBB proposal.

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