Local government budgeting is a process that is continually occurring.
In March, or early April, the taxing authority will distribute budget request forms to all the offices and departments that are included in the tax budget. These forms will request anticipated expenditures and revenues for each office or department. Many governments have developed justification forms, which ask that all expenditure requests be justified and prioritized.
In May, at least 45 days before the budget must be adopted, the budget requests will be returned to the taxing authority or chief executive officer. Very often informal hearings will be held with each elected official or department head to discuss their budget. This is a good opportunity for them to become more acquainted with the work of the departments.
Ten days prior to adopting the budget, which must be done no later than July 15, two copies must be filed with the fiscal officer, and the taxing authority must advertise for and hold a public hearing. The adopted budget must be filed with the county auditor no later than July 20th.
The tax budget includes actual revenue and expenditures for the two preceding years and first six months of the current year, and estimates of the last six months of the current year and the next year.
The budget commission meets the first Monday of August to consider the tax budgets of all local government jurisdictions, both special-purpose and general-purpose, in the county. It must complete its work by September 1. The commission is required to estimate the rates of taxes that need to be levied to fund the budget; estimate the unencumbered balances; adopt an official certificate of estimated resources; and divide the local government fund, the local government revenue assistance fund, and the library and local government support fund.
If a vote on a levy outside the 10 mill limit is approved by the voters, the budget commission will revise its estimate of resources.
On or about January 1, the fiscal officer of each taxing authority certifies the amount of money available to each fund from all sources plus carry-over balances. The budget commission then issues an amended official certificate of estimated resources.
The taxing authority must then adopt an appropriation resolution, based upon the amended certificate. This appropriation may be permanent, that is for the full year, or it may be temporary. In the event a temporary resolution is adopted, a permanent one must be adopted by April 1. The fiscal officer then certifies that the appropriation does not exceed the estimated resources. There can be no obligation of finances that are not appropriated.
The taxing authority must appropriate to several different funds. Each fund is a separate entity for accounting purposes, and has specific sources of income. Also, each fund has specified activities for which it can be used. For purposes of illustration, county funds will be used. The general fund has income from a wide variety of taxes, charges, licenses, fines, fees, sales and transfers; it is used for most of the general governmental activities of county government.
The major income from the dog and kennel fund is from the sale of dog licenses, and the money is used primarily to enforce the dog laws and pay animal claims.
Revenue for the motor vehicle and gasoline tax fund comes from the motor vehicle license tax and motor vehicle fuel tax receipts. It can only be used for the construction and repair of roads and bridges and associated expenses.
Revenue for the public assistance fund comes from state and federal payments, and also a state specified transfer from the county general fund.
The importance of understanding funds is that money in specific funds can only be expended for certain things. Public assistance money cannot be used to build bridges, and motor vehicle and gasoline tax money cannot be used to pay salaries in the recorder's office.
Each fund is divided into categories and line items. For instance, the general fund has categories for each of the offices and departments, such as auditor, treasurer, sheriff, building inspection, etc. Within each category are individual line items that are to be used for very specific purposes as defined by the Auditor of State. Generally, these items are salaries - officials, salaries - employees, supplies, equipment, contracts-repair, contracts-services, other expenses, advertising and printing, and travel. Other local governments have similar funds and line items. Detailed information on the budgeting and appropriating process may be found in ORC 5705.