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State Budget Process

Features of the Biennial Budget

Budget Bills | Operating Budget | Capital BudgetBudget Info Reporting


Budget Bills & Appropriations

The standard unit for appropriation in the budget bill is a department or agency;

Sometimes a division, program, or consolidated organizational units within a department or cabinet may constitute an appropriation unit in the Operating Budget.

Appropriations may not be transferred from one appropriation unit to another unit unless authorized by the budget bill, by charges for services, by statute, or by provisions of a temporary reorganization order.

Expenditures must be based upon an appropriation enacted by the General Assembly.

Capital project or debt service appropriations may not be used for another purpose.

Operating Budget

Fund Classification

The Budget Fund classification in the Operating Budget consists of the General Fund, the Road Fund, federal funds accounts and restricted funds accounts.

  • The General Fund - consists of state tax revenue collected under general tax laws and other designated receipts available for the activities, operations and services of state government.
  • The Road Fund - consists of money from excise or license taxation relating to gasoline or other motor fuel products, and moneys derived from fees, excise or license taxes relating to registration, operation or use of vehicles on public highways. The Constitution dedicates these revenues for highways and bridges, vehicle regulation and related state administrative purposes.
  • Federal Funds - moneys received by state agencies in the form of grants, contracts or other assistance from the federal government for specified purposes.
  • Restricted Funds - moneys collected by state agencies which are restricted by statute or budget bill for expenditure toward general or specific use by an agency. Restricted sources include regulatory or occupational licenses and fees, tuition, service charges, sales of goods or products, donations or grants from non-state sources and expendable receipts and earnings of trust type programs.

These fund sources, and proceeds from highway bond issues when authorized by the General Assembly, comprise the total operating budget of the Commonwealth.

Capital Budget

The Capital Budget lists line-item capital projects and associated appropriations by budget fund source. Road construction projects are excluded.

Budget Information Reporting

  • Budget information about services/activities and funding is organized and reported in budget documents at the budget unit level and summarized by major budget function or cabinet.
  • Appropriation information in a branch budget act is organized at the agency, its consolidated budget units or significant program level, and summarized by major budget functions for state government.
  • Operating expenditures are classified by principal categories:
    1. personnel costs - salaries, wages and per diem payments, fringe benefits, personal services contracts and other similar expenses;
    2. operating expenses;
    3. grants and other financial assistance to persons, other jurisdictions and organizations;
    4. debt service for retirement of bond principal, interest and related costs; and
    5. capital outlay for equipment items and capital projects which do not exceed the Capital Budget threshold.
  • The budget law requires that debt service appropriations not be used for any other purpose; excess General Fund and Road Fund supported debt service appropriations due to project cancellation and bond issue requirements lapse to the surplus account of the respective Fund.

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Budget Process | Legislative Process