BUDGET PROCESS IS YEAR-ROUND TASK

JEFFERSON CITY -- The current state budget has been in operation less than two months, but fiscal officials here already are working on next year's appropriations plans that undoubtedly will call for another 12 months of record spending.

For some time now the state's budgeting process has been a year-round task, sometimes with fiscal officers closely following as many as three budget years at the same time.

The current activity within the Office of Budget and Planning, a section of the Office of Administration, is the compilation of departmental requests for Fiscal Year 1996, which won't become effective until July 1, 1995. Guidelines from the budget office to directors, comptrollers and other fiscal officers in the state's 16 departments and other bureaus have already been sent, with an October 1 deadline for requests.

When the department spending requests are submitted, the budge office, under the direction of Deputy Commissioner Mark Ward, will compile the askings, as they are called in state offices, and then hearings will be scheduled for each agency to present its arguments for new funds in the next fiscal year.

These executive department hearings, coordinated with officials in the governor's office, allow agency directors to make their pitch for priority programs for the coming year, and the efficiency of these arguments often will determine whether the department's plans are outlined in the governor's annual budget recommendations, presented to members of the General Assembly in January.

If a department fails to gain concurrence of its requests from Ward and his staff, there is little likelihood they will make their way into the executive budget. And if that occurs, there's virtually no hope for an agency to gain legislative approval for the sought-after appropriations.

The way in which a governor handles appropriations requests varies, as might be imagined, by the habits of a particular chief executive. Some have taken an active role in deciding appropriation requests, while others have generally turned the work over to their staff members.

Gov. Mel Carnahan, both a lawyer and a former legislator, has taken an active interest in the budget process, while some of his predecessors have relinquished this task to assistants.

Because of the size of Missouri's multi billion-dollar budget, budget decisions have become more and more complex, particularly when federal mandates, including U.S. court orders concerning desegregation payments and changes in Medicaid regulations, change during a fiscal period.

Former governor Warren Hearnes more or less set the precedent for on-hands participations by the chief executive when he began holding budget hearings only days after his November general election victory in 1964.

Before Hearnes was sworn into office in January, his proposed budget was virtually completed. Several of his predecessors have followed that tradition since.

Hearnes did inject one personal preference into the budget process when he asked budget chairmen from both the state Senate and House to sit in on the hearings and participate in their deliberations. This practice generally hasn't been followed by his predecessors.

But that doesn't mean legislators are kept out of the loop during the annual fall budget season. Members of the legislative budget staff, hired and paid directly by the General Assembly, are very much aware of departmental fund requests and make their own evaluation on behalf of their bosses on the third and fourth floors of the Capitol.

While concurrence between executive and legislative department fiscal officers often is the case, it also isn't unusual to see a variance of enthusiasm for an agency's spending requests between the two groups.

Concurrence is more often the case when fiscal officials from both groups believe there will be sufficient revenue to fund the added spending proposals. But when projected revenue estimates are bleak, it isn't unusual to see a large number of opinions -- from optimistic to pessimistic -- about expanded appropriations for a particular agency.

The three budgets staff members in the Office of Budget and Planning, as well as their contemporaries in legislative staff offices, keep tabs on are the one just ending, the one about to begin and the budget period that follows that.

This is necessary because the office bears the responsibility of seeing that departments don't overspend their appropriations at the end of the fiscal year. This task also entails the duty of policing if it has been determined the agency was granted more funds that it needed.

There is a human tendency for departments, at this juncture, to spend every penny it was voted, whether the purchases are needed or not.

In years past, when supervision of departmental spending habits was less efficient, departments often would stockpile certain items that would be used all year long. The result sometimes was monumental excesses of standard supplies.

The rational was simple: If an agency can purchase supplies ahead, it can seek a reduction in future purchases and shift the funds to other priorities.

But that practice has become antiquated in recent years, although vestiges of the practice remain.

The year-round activity also centers on a current fiscal period, as officials make more sure their revenue estimates are on the mark. Woe be to the budget officer who, in mid-year, finds state tax revenue lagging behind his best-guess estimates of only a few months before.

Tuesday: The trials and tribulations of being Missouri's biggest spender.