Each September, every state agency, including the Chancellor's Office, submits to the Department of Finance (DOF) proposals for changes in the state budget. These proposals are submitted in the form of Budget Change Proposals (BCPs), lengthy and detailed analyses of needs, proposed solutions and expected outcomes.
In October, DOF staff meets with state agency personnel on each proposal, asking questions and seeking more data or justification. By December, following many staff-to-staff sessions, the DOF makes recommendations to the governor, and by January 10 the governor presents a proposed state budget to the Legislature. Soon thereafter, two identical appropriation bills, referred to as the budget bills, are introduced simultaneously for consideration in the Senate and Assembly by the chairpersons of the Senate Budget and Fiscal Review Committee and the Assembly Budget Committee.
The budget process in the Legislature involves detailed study and review of the items in the budget. The Legislature's own fiscal expert, the Legislative Analyst, prepares a comprehensive study of the budget and submits it to the Legislature in mid-February of each year. In reviewing the budget, the legislative fiscal committees (Budget and Fiscal Review, and Budget) divide into subcommittees to hear the various state agencies, constitutional officers, and special interest representatives. For months, the subcommittees deliberate on the budget bills and decide which items should be increased, reduced, added or deleted. Full committee hearings follow the subcommittees, and the budget bills then proceed through the normal legislative process.
The budget bills are sent to the floor of each house of the Legislature. The first house to act sends its version of the bill to the other, where the bill is routinely rejected, and the budget bills are sent to a joint budget conference committee composed of three members each from the senate and the assembly.
The conference committee on the budget bill must be open and accessible to the public, and is required to report within 15 days after both houses have passed the bills. The conference committee addresses those differences that exist between the assembly and senate versions of the budget bill. The conference committee cannot approve any item of expenditure that exceeds that contained in one of the two versions before the conference committee.
The conference report then is submitted to each house of the Legislature for approval by a two-thirds vote of the membership.
As required by law, the Legislature submits the legislatively approved budget bill to the governor by June 15. By June 30 the governor may act on the budget by vetoing specific items, reducing items or approving items. The items eliminated or reduced by the governor, ("blue penciled") in the budget bill are reconsidered separately and may be overridden by a two-thirds vote of the Legislature. However, the Legislature does not often override budget vetoes.