Legislative Budgeting Principles

• Converting non-financial assets into liquid assets to address a deficit or shortfall is known as Liquid of Deficits.
• A budget is a financial plan that outlines expected income and expenses for a defined period.
• Macro budgeting involves visible, big-picture decisions determining the size and role of government in an economy.
• Micro-budgeting consists of behind-the-scenes, smaller decisions involving specific needs and trade-offs.
• Earmarked money is funds set aside for a specific purpose.

Eight Legislative Budgeting Principles:

• Publicity means to conduct the budget in the open.
• Clarity means to write an understandable budget.
• Comprehensiveness means that all revenues, expenditures, and debt should be listed in the budget.
• Unity means funds should flow through one general fund, keeping earmarked and special funds to a minimum.
• Specification means appropriations should be written specifically.
• Prior authorization is when authorization for spending should be made before the budget is implemented.
• Periodicity is when spending should be confined to a specific period of time.
• Accuracy means revenue and spending should be correct.

Eight Executive Budgeting Principles

• Programming means the budget represents the chief executive's policy agenda.
• Responsibility implies the chief executive must execute the budget as passed by the legislature.
• Reporting means the executive branch must fully disclose finances and flow of funds.
• Tools implies the Chief executive needs staff and authority to execute the budget and spend funds.
• Procedures states the executive branch should be allowed to budget differently for a variety of activities.
• Discretion means the Executive branch should be allowed to exercise choices in the conduct of government operations.
• Flexibility means that, in timing, the executive branch should be able to adjust the budget to accommodate changing circumstances.
• Two-way Budget organization calls for budget offices within executive agencies along with a central or executive budget office with information flowing back and forth.
• Revenue Bills are proposals for laws that outline how the government can raise funds.
• Expenditure means the total amount of money a government spends to finance its activities and functions.
• Bonds are a debt security, where an issuer borrows money from investors with the promise to repay the principal amount plus interest at a specified date.
• A veto is the legal power to unilaterally stop an official action.
• A Fiscal Year is a 12-month period used for accounting, budgeting, and financial reporting purposes.
• Capital Improvement Projects are any major improvement to facilities and infrastructure.
• A Public Auditor is an independent professional who examines and verifies government financial records to ensure accuracy, transparency, and compliance with laws.
• Real Property Tax is a local government's tax on real estate within its jurisdiction.
• Impoundments occur when the President delays or withholds enacted funding.
• Deferrals are a presidential request to delay funds from being spent.
• Sequestration is the automatic across-the-board reduction of federal spending.
• Administrative Restrictions are limitations or controls imposed by a government agency on how funds can be spent.
• Disbursement is the payment of money from a fund.
• Expenditure Authority is legal permission or authorization granted to an entity or individual to spend funds for a specific purpose.
• Legislative Delegation occurs when the legislature grants specific law-making authority to another entity.
• Municipal Council is the chief executive of a city, town, or municipality.
• Appropriation is a sum of money or total of assets devoted to a special purpose.
• Tax Exemptions excludes certain income, revenue, or individuals from paying a tax.
• Public Debt is the amounts owed by different levels of government, used to finance public deficits.
• Budget Ceiling is the maximum amount of money that can be spent on a particular project, activity, or budget category.
• Balanced Budget is a budget in which revenues are equal to expenditures.
• Anticipated Revenues are the total amount of money expected to be received after a specific period of time.
• Commingling is the mixing of funds belonging to one party with funds belonging to another.
• Budget Resolution is a blueprint for Congressional action on budget-related legislation over the year, setting overall spending and revenue targets.
• Reconciliation comprises a special congressional process that allows for easier passage of tax and spending changes.
• Rescissions are a presidential request to stop funding from being spent.
• Stimulus refers to government or central bank policies designed to boost economic activity, typically through fiscal or monetary measures, aiming to increase spending, investment, and employment.
• Line-item Veto is the executive power to reject certain provisions of a bill.
• Reprogramming is shifting funds within an appropriation or account for purposes other than those originally intended.
• Amounts Obligated are the portion of funds that have been legally committed for a specific purpose but not yet paid out.
• Zero-funded accounts are those not appropriated by the legislature.
• Covenant Funds refers to federal funding granted through provisions of the Covenant.
• Independent Agencies are governmental organizations that operate outside the direct control of the executive branch.
• Government Corporation: An entity owned by the government that operates with some independence, much like a private business, and is established to provide public services.
• Property Taxes are a tax on immovable possessions like structures or land.
• Municipal Council: The governing body of a municipality, responsible for making major decisions that affect the local area.
• Contingency Fund is a reserve of money set aside to cover possible unforeseen future expenses.