Michigan's Budget Process

Developing Michigan's budget takes over a year. Work on the budget for Fiscal Year 1999 began in mid-1997, thought it did not take effect until October 1, 1998. Every departmental budget goes through the following steps, in the order listed, though the timelines given are only approximate. Some steps occur as a matter of custom rather than legal requirement. For example, every budget bill goes to a conference committee, thought this is not legally required.

1. The Governor, through the Department of Management of Budget (DMB), issues budget targets and policy instructions for each department based on expected revenues, caseloads, and desired policy directions.
(Summer; 16 months in advance)

2. Each department prepares workplans and expenditure requests based on the DMB's budget targets and instructions.
(Summer/autumn; 12-15 months in advance)

3. After receiving department workplans, DMB works with the Governor to prepare the Executive Budget.
(Autumn; 9-12 months in advance)

4. The Governor presents the Executive Budget to the legislature in midwinter in the form of legislative budget bills; half go to the House and half go to the Senate.
(Late January)

5. House and Senate Appropriations subcommittees hold public hearings on the budget area under their jurisdictions, and report substitute budget bills to the full Appropriations Committee.
(Late winter/early spring)

6. Appropriations committees report the bills out to the House and Senate.
((Mid-spring)

7. After debate and additional amendments, the House and Senate pass the bills under their jurisdictions, and send them to the other legislative chamber.|
(Mid-spring)

8. Each bill undergoes the same process in the other legislative chamber: hearings and amendments at the subcommittee and full Appropriations Committee levels, debate and amendment by the full House or Senate, and final passage. Then, the bill is returned to the legislative chamber in which it originated.
(Late spring, early summer)

9. The House and Senate always disagree on every budget bill and send each bill to its own conference committee, which is composed of members from each chamber. Conference committee members negotiate their differences and report out a compromise budget bill to both the House and Senate.
(Early summer)

10. Each chamber adopts conference committee bills, which are then sent to the Governor.
(Summer. The legislature aims to finish this process by July 4, but can be as late as Labor Day.)

11. The Governor approves each budget by signing it, usually with a few line-item vetoes.
(Midsummer)

12. Each budget act takes effect on October 1.

13. The budget process can continue beyond this: if revenue projections fall short, the governor can issue an executive order to reduce spending or transfer moneys from one part of the budget to another. If program costs exceed projected costs and sufficient state revenues exist, the legislature can pass and the Governor can sign one or more supplemental budget bills to meet the higher costs.

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