Lens on the Legislature: Structure of an Agency's Appropriation

Last week's column focused on the structure of the appropriations bill (SB1). This week's focus is on the structure of individual agency appropriations within that 900+ page bill.

Like 20 other states, Texas has a biennial budget cycle. Texas was a pacesetter among states in moving to a strategy and performance based budgeting process over a decade ago. The structure of each agency's appropriation is based on the structure of its strategic plan and the strategic plans include, among other things, performance metrics. Detailed instructions for planning and submitting Agency Strategic Plans for the current budget cycle were published by the Legislative Budget Board (LBB) in March 2004. Agencies submitted their "Strat Plans" in the June-July timeframe (schedule varied by agency).

While Strat Plans include many other things, three key items are goals, objectives, and strategies. Goals are the general ends toward which agencies direct their efforts. Objectives are clear targets for specific action. They are linked directly to goals and are measurable, time-based statements of intent. Strategies are methods to achieve goals and objectives. Strategies reflect budgetary and other resource needs and are action-oriented rather than procedural in nature. The Strat Plans also set forth the agencies' performance metrics for FY 2005-09.

In May 2004, the LBB published detailed instructions for submitting Agency Legislative Appropriations Requests (LARs). While also requiring many other data and presentation formats, the core requirement was to base appropriations requests on the goals and strategies stated in the Strat Plans. These LARs were submitted in the July-August timeframe. Keeping in mind that these requests were for the fiscal biennium that begins September 1, 2005, agencies were requesting funding for a timeframe one to three years away.

While the appropriation authorized in SB1 for each agency includes some other information described below, the core structure of the appropriation is based on the same goals and strategies the agency first stated in its Strat Plan and carried forward to its LAR. As an example, the current version of SB1 lists 37 strategies supporting 6 goals for the Department of Public Safety. A dollar amount (for each year) is shown for each strategy and a subtotal for each goal. In addition, 27 performance measure targets (each year) are listed.

An agency's appropriation will nearly always include a series of riders. A rider provides direction, expansion, restriction, legislative intent or an appropriation. Because appropriation bills deal only with spending, riders cannot change general law. That is often a very gray area.

An example of a rider in almost every agency's appropriation is one that details their capital budget authority. Riders dealing with aircraft operations, moving expenses or uniform allowances would apply to many fewer. A rider dealing with the disposition of seized funds may be unique to DPS.

Other items in each agency's appropriation include:

• Method of financing
• The number of full-time equivalent employee positions authorized
• The salaries of key employees such as the agency head
• A recapitulation of appropriations made for employee benefits

Here are some other resources for the reader who wants more detail:

• Writing the State Budget (House Research Organization)
• Budget 101 (Senate Research Center)
• Guide to Performance Measure Management (LBB)
• Statewide Goals and Benchmarks
• Diagram of the Biennial Budget Cycle