BUDGET AND FINANCE COMMITTEE

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					                                NORTH DAKOTA LEGISLATIVE COUNCIL

                                                   Minutes of the

                              BUDGET AND FINANCE COMMITTEE
                                         Wednesday, October 31, 2007
                                         Harvest Room, State Capitol
                                           Bismarck, North Dakota

    Representative Al Carlson, Chairman, called the             • Receive input from industry and academic
meeting to order at 9:00 a.m.                                     representatives on the status of the state's
    Members present: Representatives Al Carlson,                  economy,      state   revenue     impact,    and
Ole Aarsvold, Rick Berg, Merle Boucher, Jeff Delzer,              expectations for the 2009-11 biennium.
Bob Martinson, Bob Skarphol, Ken Svedjan; Senators              • Receive information from the economic
Randel Christmann, Tony Grindberg, Ray Holmberg,                  forecasting consultant under contract with the
Elroy N. Lindaas, David O'Connell, Larry J. Robinson              state on the state's economy, including
    Members absent: Representative Clark Williams;                strengths and weaknesses, and provide input to
Senator Bob Stenehjem                                             the consultant on the development of the
    Others present: See attached appendix                         July 2008 general fund revenue forecast for the
    Mr. Jim W. Smith, Legislative Budget Analyst and              2007-09 biennium and the preliminary forecast
Auditor, reviewed the Supplementary Rules of                      for the 2009-11 biennium.
Operation and Procedure of the North Dakota                     • Receive the July 2008 revised general fund
Legislative Council.                                              revenue forecast.
    Chairman Carlson commented on the committee's               • Review projected revenues, expenditures, and
responsibilities. He said because the Legislative                 fund balances of major state funds.
Council has not appointed interim budget committees             • Review preliminary information on 2009-11
during this interim to monitor and receive information            estimated      revenues    and     appropriation
on agency budgets, this committee will also be                    requirements, including cost to continue items.
fulfilling that responsibility. He said the committee will      • Discuss possible legislative initiatives that
also be gathering information on major budget items               would affect the budget.
to assist the 2009 Legislative Assembly in its                  • Discuss possible methods of returning excess
consideration of state budget issues.                             revenues to North Dakota taxpayers.
                                                                • Identify   key     budget    issues    for    the
      COMMITTEE RESPONSIBILITIES                                  2009 legislative session.
   The Legislative Council staff presented a                    • As appropriate, make recommendations to the
background memorandum entitled Budget and                         Legislative Council.
Finance Committee - Background Memorandum. The
Legislative Council staff reviewed the following
potential duties and responsibilities of the committee:
                                                                           PREVIOUS STUDIES
                                                                 The Legislative Council staff reviewed previous
   • Monitor the status of state revenues and
                                                             studies relating to the budget process.            The
      expenditures for the 2007-09 biennium.
                                                             Legislative Council staff said that beginning with the
   • Receive input from major state agencies                 1975-76 interim, a Legislative Council interim
      regarding the status of their budgets and              committee has been assigned the responsibility of
      changes in federal funds.                              monitoring the status of major state agency and
   • Receive information from major state agencies           institution appropriations. In previous bienniums, the
      regarding anticipated program changes, costs           committee's review placed emphasis on expenditures
      to continue, and other budget needs for the            of major state agencies.
      2009-11 biennium, including elementary and                 A report on the status of agency compliance with
      secondary education, higher education, human           legislative intent has been completed each interim
      services, corrections, and transportation.             since 1987-88. This report has included the status of
   • Receive       information     on     any   deferred     state agency and institution budgets, the status of the
      maintenance issues relating to facilities and          implementation of budget/programmatic changes,
      other      infrastructure     throughout      state    legislative directives contained in appropriation bills
      government.                                            and other legislation, and the identification of key
   • Review current budget forms and guidelines,             agency budget issues.
      consider any appropriate changes, and provide              The Legislative Council staff said the 1997-98
      a recommendation to the Budget Section.                interim Budget Committee on Government Finance,
                                                             Senator David E. Nething, Chairman, studied North
Budget and Finance                                        2                                         October 31, 2007


Dakota's budgeting process. As part of the study, the                and to the organizational session of the
committee:                                                           Legislative Assembly.
     1. Considered the development of a legislative               • February/March revised revenue forecast -
        budget and recommended a bill which would                    Presented in either February or March during
        have created a legislative budget committee                  the legislative session at which time the
        and additional interim committees to provide                 forecast is reviewed by legislative leadership,
        assistance to the Legislative Assembly in the                Appropriations Committee members, and
        development of the legislative budget.                       Finance and Taxation Committee members of
     2. Reviewed the performance budgeting pilot                     both houses. The Appropriations Committees
        project.                                                     by motion approve the revised revenue forecast
     3. Considered other budgeting issues.                           which is then used as the "official" legislative
    The Legislative Council staff said the 2003-04                   revenue forecast. The Legislative Assembly
interim Government Performance and Accountability                    has generally not changed the revised revenue
Committee, Representative Al Carlson, Chairman,                      forecast.
studied    state    government     performance    and             During the 2007 legislative session, this forecast
accountability practices and recommended House Bill           was received in February. Previously, this forecast
No. 1035 providing for the creation of a government           was received in March.
performance and accountability system. The bill was               The Office of Management and Budget contracts
amended by the 2005 Legislative Assembly to provide           with Moody's Economy.com to provide economic
for a government performance and accountability               projections for the state of North Dakota. North
system pilot project.                                         Dakota's current contract with Moody's Economy.com
    The 2005-06 interim Budget Committee on                   is for the period beginning November 14, 2005, and
Government Services, Representative Al Carlson,               ending November 13, 2007. The contract provides for
Chairman, was assigned responsibility to establish the        the state of North Dakota to pay Moody's
government performance and accountability pilot               Economy.com two annual payments of $26,185 or
project involving up to three executive branch                $52,370 per biennium.
agencies. The committee approved designating the                  The state subscribes to the following Moody's
Department of Transportation, Parks and Recreation            Economy.com publications:
Department, and the Highway Patrol as participants in             • Regional Financial Review.
the government performance and accountability                     • Precis: State.
system pilot project. The committee did not make any              • Precis:      Macro With U.S. Macro/Financial
recommendations        regarding    the   government                 Database.
performance and accountability system pilot project.              Moody's Economy.com provides tax-based
                                                              forecasts for each of the major taxable sectors.
             NORTH DAKOTA'S                                   Reports prepared by Moody's Economy.com include
            BUDGETING PROCESS                                 analyses and forecasts of sweet crude oil prices and
    The Legislative Council staff reviewed North              production. As needed, Moody's Economy.com will
Dakota's budgeting process and constitutional and             also include analyses and forecasts of North Dakota's
statutory provisions relating to the state budget,            major crops and livestock, including farm income and
including Article V, Section 7, of the Constitution of        cash receipts for livestock and products.
North Dakota relating to the powers of the Governor,              The Tax Department is responsible for the basic
Article X, Section 12, of the Constitution of North           methodology for forecasting the following general fund
Dakota relating to legislative appropriations, North          tax types--sales, motor vehicle excise, individual
Dakota Century Code (NDCC) Sections 54-35-12                  income, corporation income, financial institution, oil
through 54-35-14 relating to the powers of the                extraction, oil and gas production, cigarette and
legislative budget analyst and auditor, and Chapter           tobacco, coal conversion, and wholesale liquor taxes.
54-44.1 relating to the office of the budget.                 The revenue forecasting process includes the
    The Legislative Council staff reviewed North              following steps:
Dakota's revenue forecasting process and said the                 • At the start of each of the three forecasts, the
executive budget office has primary authority for                    Tax Department updates the historical tax base
revenue forecasting in North Dakota. Historically,                   statistics and provides the results to Moody's
during each biennium, the Office of Management and                   Economy.com.
Budget (OMB) issues three revenue forecasts:                      • Moody's Economy.com processes the historical
    • June preliminary revenue forecast - Issued in                  data through forecasting models, adjusting and
       the even-numbered year prior to the start of the              updating forecast equations or "drivers" as
       legislative session.                                          needed.
    • December        executive       budget  revenue             • The Tax Department and Office of Management
       forecast - Presented along with the executive                 and Budget participate in conference calls with
       budget recommendations to the Budget Section                  Moody's Economy.com to discuss views on the
                                                                     United States and North Dakota economies.
Budget and Finance                                         3                                         October 31, 2007


   • Moody's Economy.com creates North Dakota's                oil again being discounted due to limited pipeline
       tax-based forecasts for each of the next three          capacity.
       fiscal years.                                               In response to a question from Representative
   • The Office of Management and Budget                       Carlson, the legislative budget analyst and auditor
       schedules a meeting of the Revenue Advisory             said the proposed constitutional amendment affecting
       Committee to review the tax-based forecasts             the amount of oil tax revenue deposited in the general
       and make any modifications as determined by             fund and the amount deposited in the permanent oil
       the committee.                                          tax trust fund would begin in July 2009. He said the
   • The Tax Department applies the appropriate tax            proposal provides that the first $100 million of oil tax
       rates and statutory distributions through the use       revenues be deposited in the state general fund and
       of in-house tax revenue models to produce the           the remainder in the permanent oil tax trust fund. He
       tax revenue forecast, which is supplied to the          said the $100 million deposited in the general fund
       Office of Management and Budget.                        would be allowed to increase each biennium by the
   The Revenue Advisory Committee is a committee               consumer price index. He said money deposited in
generally consisting of private sector members, at             the permanent oil tax trust fund may be spent only
least two legislators, and other public officials. The         upon approval by at least 75 percent of the Legislative
Revenue Advisory Committee, which was created by               Assembly.
the Office of Management and Budget, meets before                  Senator Christmann asked for information on the
each forecast is issued to review the economic                 availability of a consumer price index specific to North
projections and resulting tax-based forecasts.                 Dakota and, if available, how the index is calculated
                                                               for the state. He also asked for information comparing
            FISCAL INFORMATION                                 the percentage change in North Dakota personal
    The Legislative Council staff presented a schedule         income to the percentage change in North Dakota
comparing general fund collections to revenue                  inflation and information on causes of the variances.
forecasts for the period 1981-83 through 2005-07.                  Representative Skarphol asked the Legislative
Actual revenues varied from being 15.6 percent less            Council staff to provide a graph showing the level of
than forecast in the 1981-83 biennium to being                 higher education general fund appropriations and
19.8 percent more than forecast in the 2005-07                 tuition income in total and percentage changes for the
biennium.                                                      last 10 years.
    The Legislative Council staff distributed a copy of            Representative Delzer asked for information on the
the June 2007 state economic report for North Dakota           level of assets included in the common schools trust
prepared by Economy.com.                                       fund since the 1997-99 biennium.
    The Legislative Council staff reviewed the                     Representative Berg asked for additional
memorandum entitled Fiscal Information Summary                 information on the common schools trust fund,
which included information on various tax revenue              including constitutional and statutory provisions
sources and major expenditure items.                           relating to investments and distributions from the fund
    The Legislative Council staff distributed an               and current investment strategies and distributions
economic brief prepared by the North Dakota State              made by the Board of University and School Lands.
Data Center on oil production in North Dakota. The                 Representative Skarphol asked for information on
information indicated that North Dakota ranked ninth           the number of clients served by the Department of
in crude oil production out of 31 oil-producing states         Human Services in long-term care facilities compared
and two federal offshore areas in 2006.            The         to those served in home and community-based care
Legislative Council staff said that of the major               programs.
oil-producing states in the United States, only North              Regarding Department of Corrections and
Dakota and Montana have experienced increased oil              Rehabilitation information, Representative Berg asked
production during the last 10 years.                           for projected inmate populations for the next 10 years.
    Ms. Roxanne Woeste, Senior Fiscal Analyst,                 Senator Christmann asked for additional information
Legislative Council, presented a report entitled Budget        on the current biennium's appropriation increase,
and Fiscal Trends which provided information on state          including amounts related to medical costs.
revenue and expenditure levels during the last                 Representative Boucher asked the Legislative Council
10 years.                                                      staff to project for the next 10 years Department of
                                                               Corrections and Rehabilitation spending based on
                                                               historical spending trends which reflect a biennial
          COMMITTEE DISCUSSION                                 increase of 30.6 percent. Senator Grindberg asked
   Representative Delzer asked the Legislative                 for the number of male inmates in the corrections
Council staff to review the factors included in the            system who have been incarcerated for the first time
determination of the consumer price index.                     as a result of a drug offense.
   Representative Skarphol expressed concern that                  Senator Holmberg asked that the state employee
while oil produced in North Dakota is currently not            information identify programs transferred from political
experiencing discounting, an increase in oil production        subdivisions or other entities to the state that have
in Canada has the potential to result in North Dakota          resulted in additional state employees.
Budget and Finance                                               4                                               October 31, 2007


    Representative Aarsvold asked for the level of                   11. October 2008    Review federal fund receipts for the
local funding support for programs for which the state                                   2007-09 biennium compared to
                                                                                         appropriated amounts and anticipated
also provides support, such as schools.                                                  2009-11 changes
    Representative Berg asked for the impact on                      12. March-          Discuss possible legislative initiatives that
property taxes of state aid to various programs at the                   October 2008    would affect the budget
local level.                                                         13. March-          Discuss possible methods of returning
    Representative Delzer asked for additional                           October 2008    excess revenues to North Dakota
information on why oil and coal distributions to political                               taxpayers
subdivisions declined for the 2007-09 biennium.                      14. March-          Identify key budget issues for the 2009
                                                                         October 2008    legislative session
    Representative Boucher asked for information on
                                                                     15. July-           As appropriate, develop recommendations
the percentage of county budgets that is provided by                     October 2008    and prepare any legislation necessary to
state aid. Chairman Carlson suggested a small,                                           implement the recommendations
medium, and large county could be used as an                         16. October 2008    Prepare a final report for submission to the
example to provide this information.                                                     Legislative Council
    Senator Christmann suggested that the property
tax relief proposal approved by the 2007 Legislative                     Chairman Carlson said it is his intent that the
Assembly should be considered as state aid to                        committee spend the majority of its time focusing on
political subdivisions.                                              major budgetary items, including education, human
                                                                     services, corrections, and transportation.
                                                                         Representative Svedjan suggested the committee
                    STUDY PLAN                                       consider the development of budget parameters to
   The Legislative Council staff said the committee
                                                                     provide to the 2009 Legislative Assembly to assist it in
may wish to proceed with its potential duties and
                                                                     determining appropriate revenue and spending levels
responsibilities as follows:
                                                                     for the 2009-11 biennium.
 1. October 2007-   Receive reports from OMB on the status               Chairman Carlson suggested the committee
    October 2008    of the general fund and other selected           receive status reports from state agencies authorized
                    special funds, including revenue                 one-time expenditures for the 2007-09 biennium.
                    collections and expenditures                         Chairman Carlson suggested the committee
 2. October 2007-   Review current budget forms and
                                                                     monitor and analyze the potential impact of the
    January 2008    guidelines, consider any appropriate
                    changes, and provide a recommendation            proposed initiated measures affecting state tax
                    to the Budget Section                            revenues that may need to be addressed by the
 3. January-        Receive reports from selected state              2009 Legislative Assembly.
    June 2008       agencies regarding the status of the                 Chairman Carlson said that recommendations or
                    2007-09 biennium budget, including any           legislation being made or proposed by other
                    budget-related concerns, federal funds           Legislative Council interim committees will be
                    changes, and programmatic changes
 4. January-        Review information from state agencies
                                                                     available for review by this committee as it identifies
    August 2008     and institutions on deferred maintenance         major budget issues for the 2009 legislative session.
                    issues relating to facilities and other              It was moved by Senator Holmberg, seconded
                    infrastructure throughout state government       by Representative Skarphol, and carried on a
 5. March-          Receive information from selected state          voice vote that the committee proceed with its
    August 2008     agencies regarding anticipated costs to          responsibilities as follows:
                    continue and other budget needs for the
                    2009-11 biennium                                  1. October 2007-    Receive reports from OMB on the
 6. January-        Receive information from industry and                October 2008     status of the general fund and other
    August 2008     academic representatives on the status of                             selected special funds, including
                    the state's economy, state revenue                                    revenue collections and
                    impact, and expectations for the 2009-11                              expenditures
                    biennium                                          2. October 2007-    Review current budget forms and
 7. March-          Receive information from representatives             January 2008, or guidelines, consider any appropriate
    April 2008      of Moody's Economy.com on the state's                later as         changes, and provide a
                    economy, including strengths and                     appropriate      recommendation to the Budget
                    weaknesses and provide input on the                                   Section
                    development of the July 2008 revenue              3. December 2007- Receive reports from selected state
                    forecast                                             June 2008        agencies regarding the status of the
 8. March-          Review preliminary information on                                     2007-09 biennium budget, including
    October 2008    2009-11 estimated revenue and                                         any budget-related concerns, federal
                    appropriation requirements, including cost                            funds changes, and programmatic
                    to continue items                                                     changes
 9. July-           Receive the July 2008 revised revenue             4. December 2007- Receive status reports from state
    August 2008     forecast                                             August 2008      agencies authorized one-time
10. October 2008    Review projected revenues, expenditures,                              expenditures for the 2007-09
                    and fund balances of major state funds                                biennium
Budget and Finance                                            5                                                October 31, 2007


 5. December 2007-   Review information from state                   Based on Ms. Sharp's testimony, the following
    August 2008      agencies and institutions on                 schedule compares the actual July 1, 2007, balance
                     deferred maintenance issues relating
                     to facilities and other infrastructure
                                                                  to the estimate made during the legislative session
                     throughout state government                  and the current estimate of the June 30, 2009,
 6. March-           Monitor and analyze the potential            balance to the estimate made during the legislative
    October 2008     impact of proposed initiated tax             session.
                     measures on future state revenues
 7. March-           Receive information from selected                                                                 Additional
                                                                                         April 2007       Actual        Funds
    August 2008      state agencies regarding anticipated                                Forecast        Balance       Available
                     costs to continue and other budget           Beginning balance -
                     needs for the 2009-11 biennium               July 1, 2007
 8. January-         Receive information from industry
                                                                  General fund           $218,350,170   $295,541,176    $77,191,006
    August 2008      and academic representatives on the
                     status of the state's economy, state         Budget stabilization    200,000,000    200,000,000                0
                                                                  fund
                     revenue impact, and expectations for
                     the 2009-11 biennium                         Permanent oil tax       136,666,681    143,270,662      6,603,981
 9. March-           Receive information from                     trust fund
    April 2008       representatives of Moody's                   Total                  $555,016,851   $638,811,838    $83,794,987
                     Economy.com on the state's                                          April 2007      Current        Increase
                     economy, including strengths and                                    Forecast        Estimate      (Decrease)
                     weaknesses and provide input on              Ending balance -
                     the development of the July 2008             June 30, 2009
                     revenue forecast                             General fund            $18,656,179   $134,073,252   $115,417,073
10. March-October    Review recommendations of other              Budget stabilization    200,000,000    200,000,000                0
    2008             interim committees that if approved          fund
                     will affect the 2009-11 biennium
                                                                  Permanent oil tax       136,967,547    143,572,066      6,604,519
                     budget                                       trust fund
11. March-           Review preliminary information on
    October 2008     2009-11 estimated revenue and                Total                  $355,623,726   $477,645,318   $122,021,592
                     appropriation requirements,
                     including cost to continue items                Ms. Sharp said the $77 million of additional
12. July-            Receive the July 2008 revised                general fund money available on July 1, 2007, was
    August 2008      revenue forecast                             the result of revenues exceeding projections by
13. October 2008     Review projected revenues,                   $74 million and 2005-07 general fund turnback being
                     expenditures, and fund balances of           $3 million more than the $10 million anticipated.
                     major state funds                            Ms. Sharp said the June 30, 2009, general fund
14. October 2008     Review federal fund receipts for the         ending balance has increased by an additional
                     2007-09 biennium compared to
                     appropriated amounts and                     $38 million due to general fund revenues exceeding
                     anticipated 2009-11 changes                  the forecast during the first three months of the
15. March-           Discuss possible legislative                 2007-09 biennium.
    October 2008     initiatives that would affect the               Ms. Sharp said in October 2007 OMB transferred,
                     budget                                       pursuant to Section 12 of 2007 Senate Bill No. 2032,
16. March-           Discuss possible methods of                  $115 million from the permanent oil tax trust fund to
    October 2008     returning excess revenues to North
                     Dakota taxpayers
                                                                  the general fund.
17. March-           Identify key budget issues for the              Ms. Sharp presented a schedule listing each
    October 2008     2009 legislative session                     agency's unspent 2005-07 biennium general fund
18. July-October     Consider development of budget               appropriation authority which totaled $13,069,134.
    2008             parameters to assist the 2009                   Senator Holmberg asked for additional detail on
                     Legislative Assembly in determining          the unspent appropriation authority of the North
                     its appropriate revenue and                  Dakota University System office. Ms. Sharp said she
                     spending levels for the 2009-11
                     biennium                                     would provide that information to the committee.
19. July-            As appropriate, develop                         Chairman Carlson asked the Legislative Council
    October 2008     recommendations and prepare any              staff to prepare a schedule showing the possible
                     legislation necessary to implement           budget stabilization fund transfer at the end of the
                     the recommendations                          2007-09 biennium based on projected ending general
20. October 2008     Prepare a final report for submission        fund balances.
                     to the Legislative Council
                                                                     Ms. Sharp presented a schedule listing the
                                                                  2005-07 biennium appropriations authorized to
    GENERAL FUND STATUS REPORT                                    continue for the 2007-09 biennium. Ms. Sharp said
   Ms. Pam Sharp, Director, Office of Management                  that the gross unexpended general fund appropriation
and Budget, presented information on the status of                authority at the end of the 2005-07 biennium totaled
the general fund, major revenue variances to date,                $30.9 million; however, approximately $2.2 million
unspent 2005-07 biennium general fund appropriation               was continued into the 2007-09 biennium for capital
authority, and 2005-07 biennium appropriations                    construction projects, $14.9 million due to statutory
continuing into the 2007-09 biennium.                             exemptions from NDCC Section 54-44.1-11, $726,000
Budget and Finance                                           6                                          October 31, 2007


relating to bills with emergency clauses, and $43,000                Ms. Peterson reviewed the budget forms
for other adjustments, leaving a net unexpended                  completed by agencies as part of their budget
general fund appropriation authority of $13.1 million.           requests and statutory requirements for the budget
A copy of the report is on file in the Legislative Council       data presented as part of the executive budget.
office.                                                              In response to a question from Representative
    Representative Skarphol asked that OMB include               Carlson, Ms. Peterson said the executive budget
in future reports a schedule showing the distribution of         office asks agencies to complete a 95 percent,
oil and gas-related tax collections to local                     98 percent, or hold-even budget. She said this results
governments. Ms. Sharp said that information will be             in agencies needing to explore and develop more
included on future reports.                                      efficient methods of providing their services.
    The committee recessed for lunch at 12:05 p.m.                   In response to a question from Representative
and reconvened at 1:00 p.m.                                      Berg, Ms. Peterson said OMB plans to identify one-
                                                                 time expenditures as part of the executive budget;
   EXECUTIVE BUDGET PREPARATION                                  however, she does not anticipate the information will
        PROCESS AND FORMS                                        be available on the budget forms prepared by
    Ms. Sheila Peterson, Director, Fiscal Management             agencies. Representative Berg encouraged OMB to
Division, Office of Management and Budget, provided              include one-time expenditures on the budget forms to
information on the executive budget preparation                  be completed by state agencies and that this
process, budget forms, and anticipated budget                    information be a part of the budget analysis and
guidelines and forms for the 2009-11 biennium                    reporting system (BARS).
budget.                                                              Representative Carlson suggested that agencies
    Ms. Peterson said the budget preparation process             on the budget forms identify in more detail the cost to
begins at the beginning of each even-numbered year               continue changes, which will allow for an accurate
by OMB releasing instructions and guidelines to state            compilation of statewide costs to continue.
agencies for the preparation of their budget request                 Representative Berg suggested that OMB
for the upcoming biennium. Ms. Peterson said in April            encourage agencies to be innovative in their budget
preliminary information on buildings and infrastructure          development in order to provide better services to the
is due from agencies and is used for building and                citizens of North Dakota, to become more efficient,
infrastructure formulas.      She said in July the               and to incorporate the best practices of other states.
preliminary revenue forecast is completed and July 15                Ms. Peterson said in the past, the executive
is the statutory deadline for agencies to submit their           budget has recommended that agencies be allowed to
budget requests.       She said extensions may be                retain a portion of their unspent appropriation authority
granted to agencies upon a written request to OMB.               to use the following biennium for one-time purposes;
Ms. Peterson said extensions are often granted to                however, the Legislative Assembly has not approved
allow agencies to include the most current information           this proposal.
in the preparation of their budget request.                          Representative Skarphol said agencies have not
    After the budget requests have been submitted by             been consistent in charging information technology
the agencies and certified by the executive budget               expenditures to the appropriate object codes. He
analysts, budget hearings are held on agency budget              asked whether in the future these expenditure items
requests and, subsequently, the budget analysts                  will be more accurate. Ms. Peterson said OMB has
complete their recommendations for each budget.                  worked with the Information Technology Department
Ms. Peterson said the executive budget revenue                   to improve the reporting of information technology-
forecast     is   completed     in    November     and           related expenditures of state agencies and that the
recommendations are finalized.          She said the             information should now be more consistent among the
executive budget is presented to the Legislative                 agencies.
Assembly at the beginning of December prior to the                   In response to a question from Representative
legislative session.                                             Skarphol, Ms. Peterson said OMB will provide a listing
    Ms. Peterson reviewed the revenue projection                 of funds appropriated for 2005-07 biennium deferred
process and said that most tax-related forecasts are             maintenance items and the amounts spent by
developed with the assistance of the Tax Department              agencies for these purposes.
and Economy.com. She said OMB projects interest                      Representative Delzer suggested the committee
income and departmental collections categories of the            consider including the number of full-time equivalent
revenue forecast.                                                positions authorized for each agency in appropriation
                                                                 bills.
Budget and Finance                                      7   October 31, 2007


   Chairman Carlson announced the next committee
meeting is tentatively scheduled for Thursday,
December 13, 2007.
   The committee adjourned subject to the call of the
chair at 2:15 p.m.


___________________________________________
Allen H. Knudson
Assistant Legislative Budget Analyst and Auditor


___________________________________________
Jim W. Smith
Legislative Budget Analyst and Auditor

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