8.3 The Budgeting Process: How the Operating Budget Is Made

The state budget process in Ohio is a systematic procedure that determines how the state allocates its financial resources over a two-year period. This process involves various actors, including state agencies, the Governor, and the General Assembly.

Here are the steps used to create the operating budget:

Preparation by State Agencies 

Agencies receive instructions from the Office of Budget and Management (OBM) on how to prepare their budget requests and submit them to OBM for review.

Formulation by the Governor 

OBM collaborates with the Governor to develop budget recommendations, which are compiled into the executive budget document (“blue book”).

Submission to the General Assembly 

The Governor submits the executive budget to the General Assembly for review and approval.

Legislative Process 

The Legislative Service Commission drafts the Governor’s proposed budget into bill form, which is reviewed, amended, and approved by both the House and Senate. 

The legislative process involves several key steps. First, the proposed budget is introduced in the House of Representatives, where the House Finance Committee and its subcommittees conduct hearings. They review the budget, propose amendments, and draft a substitute bill incorporating their changes. This bill is then considered and amended by the full committee before being sent to the House floor for a vote.

Once the House passes the budget, it moves to the Senate, where the Senate Finance Committee and its subcommittees conduct a similar review. They may draft their own substitute bills to include desired changes. After thorough review and amendments, the Senate passes its version of the budget bills. Often, the Senate Finance Committee starts its review process while the bill is still under consideration in the House committee to manage the limited time available effectively.

Given that the House and Senate versions of the budget bills typically differ, a conference committee is convened to reconcile these differences. This committee, comprising members from both chambers, works to create a final version of the budget that is acceptable to both the House and the Senate. The committee’s report is then submitted to both chambers for approval.

Governor’s Approval 

The approved budget bills are sent to the Governor for signature or veto. The General Assembly can override vetoes with a three-fifths majority vote. The Constitution empowers the Governor to veto any item in an act making an appropriation, but the General Assembly has the power to override a line-item veto by a three-fifths majority vote in each house.

A line-item veto is the power of an executive authority, such as the Governor, to reject specific provisions a budget, without vetoing the entire appropriations bill. The General Assembly has the power to override a line-item veto by a three-fifths majority vote in each house. 

Reference

Ohio Legislative Service Commission. 2023. Chapter 8 – The Ohio Budget Process.