Pedro is the governor of Texas. During the biennial budget ...

[dbose]

Pedro is the governor of Texas. During the biennial budget meeting, it was found that the state legislature has a deficit of 3 million. Which emergency fund can Pedro use to bridge this economic deficit? Describe the fund.
 
  What will be an ideal response?

Question 2

The Water Conservation Unit is a government agency that needs advice on its budgetary decisions. Describe the budgetary creation process and how the Legislative Budget Board can help in the process.
 
  What will be an ideal response?

[bobsmith]

Answer to Question 1

Answer:
A. Rainy Day Fund/Economic Stabilization Fund
1. constitutionally-mandated fund was approved by voters in 1988
2. dedicates 75 percent of both oil and natural gas collections above the 1987 standard to the stabilization fund
3. can be used during recession or for other economic necessity
4. precedent has been set for use
a. In 2011, the legislature took 3.2 billion from the fund to help close the budget shortfall
5. restrictions for use of the fund
a. it takes separate 60 percent votes in both the house and senate to tap the fund
1. if a deficit develops during a cycle
2. if actual revenue drops from one biennium to another
b. outside of these events it takes a two-thirds vote in each house to appropriate fund money

Answer to Question 2

Answer:
A. Budget creation
1. Begins at agency level
a. must submit a Legislative Appropriation Request (LAR) b. based on past expenditures and anticipated needs
c. all agencies have a long-term strategic plan
d. sets goals over a five-year period
e. a new plan established every other year
2. Legislative Budget Board
a. provides guidance to agencies in regard to their requests
b. tells how much more or less they should expect to spend in the coming biennia.
c. to construct the budget
3. legislative process
a. comptroller's Biennial Revenue Estimate is delivered to the legislature
b. LBB plan is then introduced in both the House and
Senate
c. Appropriations Committee in the House and the Finance Committee in the Senate craft spending bills
d. individual lawmakers have the opportunity to affect spending both through these committees and through floor debate
e. final appropriations bill will emerge from conference committee
f. the governor can veto individual line items from the budget
g. LBB and the governor can alter spending without having to call a special session
1. cannot increase spending
2. can either impound or transfer funds, as long as both parties agree
3. transferred funds can either be used within the original agency or shifted to a different one