ARIZONA STATE SENATE
Phoenix, Arizona
state budget cycles.
Replaces Arizona's biennial budgeting system with a bifurcated budgeting system, requiring the state's large budget units to be enacted annually rather than biennially.
In 1993, the Arizona State Legislature initiated a series of budget reform measures, enacting legislation to convert small and medium sized budget units to a biennial budget cycle and establishing the program authorization review (PAR) process to evaluate the effectiveness and efficacy of state programs (Laws 1993, Chapter 252). In 1997, the eleven largest budget units were placed on the biennial cycle, effective FY 1999-2000 and FY 2000-2001 (Laws 1997, Chapter 210). Laws 1997, Chapter 210 provided that the major emphasis of the first regular session of each Legislature would be budgetary review and approval, while program evaluations would be conducted during the second regular session. In 1999, the PAR process was streamlined and renamed the strategic program area review (SPAR) process (Laws 1999, Chapter 148). The SPAR process has continued to take place during the second regular session of the Legislature, but is more focussed on the review of interrelated programs.
The advantages of biennial budgeting include more time for program review and evaluation and reduced agency costs in preparing budget requests. However, since the enactment of the biennial budget cycle, some concern has been expressed over the difficulty of forecasting revenues and caseload growth for a 30-month period. H.B. 2700 reestablishes a bifurcated budget cycle, placing the larger state budget units on an annual budget cycle and continuing the biennial cycle for the remaining budget units.
1. Places the following budget units on an annual budget cycle rather than biennial cycle:
a) Department of Education
b) Arizona Board of Regents
c) Arizona State University (including West and East campuses)
d) University of Arizona
e) Northern Arizona University
f) State Board of Directors for Community Colleges
g) School Facilities Board
h) Department of Economic Security
i) State Department of Corrections
j) Department of Juvenile Corrections
k) Arizona Health Care Cost Containment System
l) Department of Health Services
m) Department of Administration
n) Department of Transportation
o) The judiciary, including the Supreme Court, the Court of Appeals and Superior Court.
2. Allows the Governor to require biennial budget units to submit budget estimates more often than every two years.
3. Specifies that the Governor's Office of Strategic Planning and Budgeting (OSPB), rather than the Department of Administration, shall be available to the legislature for explanation of any recommendation made in the Governor's budget report.
4. Requires annual budget units to develop five-year strategic plans containing strategic issues, a mission statement, description, goals, strategies and resource assumptions to be submitted to OSPB by September 1 of each year and updated annually as necessary.
5. Requires biennial budget units to develop an operating plan, a mission statement, description and strategic issues to be submitted to OSPB by September 1 of each year.
6. Requires that OSPB publish a federal funds report annually.
7. Makes the capital process an annual process.
8. Provides definitions.
9. Makes technical and conforming changes.
10. Makes the provisions applicable beginning FY 2003-2004.
APPROP 3/25/02 DPA 10-4-0-2-0
3rd Read 4/09/02 41-12-7-0
Prepared by Senate Staff
April 19, 2002