DD OSg ETAIS Fe 2 Oe ee SOS KFM Legislative Fiscal Report 2003 biennium é aa tear e oe Teh Aa ll x|= MONTANA LEGISLATIVE LIBRARY E ~LEGISLATIVE FISCAL REPORT 2003 Biennium Volume 3 — Agency Budgets Presented to the Fifty-seventh Legislature Submitted by The Legislative Fiscal Division Helena, Montana June, 2001 itis gant?o a : elas ehb ut WoyL oe oatse a 4 or a 4 Th dl be ae oe eed uel dite oh oe “a ; ' | Shioedl APPROPRIATIONS BY AGENCY AND PROGRAM — INTRODUCTION — eis Fs: "20 wthM TL Pos L: ri Anainteninttttiy| ie «: saree uloee a iia pels 2q i iisr ene mall FL — 1 SS APPROPRIATIONS BY AGENCY AND PROGRAM This summary of the layout and composition of the "Appropriations by Agency and Program" section (Volumes 3 and 4) is designed to provide the reader with a "road map" for reading and utilizing the agency appropriations report that follows. The report on agency and program appropriations is designed to provide a resource for legislators and members of the public to understand actions taken on agency budgets by the legislature and their impact on agency operations. It does this by detailing the components of the budget, as well as providing a summary of legislative action, and a discussion of other legislation impacting the agency. The agencies are grouped by categories that mirror the groupings used in the appropriations process, and are summarized below. | Agency Subcommittee Groupings GENERAL GOVERNMENT AND EDUCATION (Section E) TRANSPORTATION (Section A) Legislative Branch Office of Public Instruction Consumer Counsel Board of Public Education Judiciary School for the Deaf and Blind Montana Chiropractic Legal Panel Montana Arts Council Governor's Office State Library Commission Secretary of State Montana Historical Society Commissioner of Political Practices Montana University System State Auditor’s Office Commissioner of Higher Education Transportation Six University Units Revenue Colleges of Technology Administration Community Colleges Appellate Defender Commission Agricultural Experiment Station Cooperative Extension Service Forestry and Conservation HEALTH AND HUMAN SERVICES (Section B) Experiment Station Bureau of Mines Public Health & Human Services Fire Services Training School Tribal Colleges Assistance NATURAL RESOURCES AND COMMERCE LONG-RANGE PLANNING (Section F) (Section C) Fish, Wildlife and Parks Long-Range Building Program Environmental Quality Treasure State Endowment Program Livestock Oil Overcharge Program Natural Resources and Conservation State Building Energy Conservation Agriculture Resource Indemnity Trust Interest Grant and Commerce Loan Program Cultural and Aesthetic Grant Program Information Technology Bonds INSTITUTIONS AND PUBLIC SAFETY (Section D) Board of Crime Control Justice Public Service Regulation Corrections Labor and Industry Military Affairs LEGISLATIVE FISCAL REPORT 2003 BIENNIUM LEGISLATIVE FISCAL DIVISION APPROPRIATIONS BY AGENCY AND PROGRAM BUDGET PRESENTATIONS The appropriations for all agency budgets were established and the appropriations report is written using the precepts contained in statute that require that the budget be presented in three tiers: 1. base budget, which is defined as "that level of funding authorized by the previous legislature"; 2. present law budget, defined as "that level of funding needed under present law to maintain operations and services at the level authorized by the previous legislature..."; and 3. new proposals, which are "requests to provide new non-mandated services, to change program services, to eliminate existing services, or to change sources of funding..." The appropriations report is presented in such a way as to show legislative action on each present law adjustment and new proposal made to the base budget to derive the 2003 biennium agency budget. LEGISLATIVE APPROPRIATIONS Legislative appropriations are made via two ways: 1) temporary appropriations bills, which are valid for a two- year period; and 2) statutory appropriations, which are appropriations authorized within substantive law and effective as long as the law remains in effect. The legislature generally uses two vehicles to make temporary appropriations: 1) HB 2; and 2) other appropriations bills, generally referred to as “‘cat-and-dog” bills. HB 2 is the general appropriations bill, in which over 90 percent of all general fund is appropriated in the 2003 biennium. Statutory appropriations, while they represent an obligation on revenues and are included in any total expenditure tallies, do not require the passage of a bill to be effective. In addition, while the legislature estimates total statutory appropriations for the purpose of determining total available revenues for other appropriations, actual statutory appropriations will depend upon the underlying conditions controlling the appropriation, such as the level of debt service required, which is a function of not only the total debt undertaken, but factors such as prevailing interest rates. The tables in the narrative within the “Appropriations by Agency and Program” section contain only HB 2 appropriations. As such: the figures do not include the 2001 biennium pay plan adopted by the legislature in HB 13, as final allocations of funds to agencies and programs to implement the pay plan had not been made by the Office of Budget and Program Planning (OBPP) at the time of writing of this report; 2. the tables do not include other appropriation bills. Consequently, in some instances it may be necessary for clarity to include extra tables to supplement the main narrative tables; and 3. no statutory appropriations that may be made to or administered by an individual agency are included. For all multiple program agencies, the narrative is divided into two parts: 1) the agency narrative; and 2) the program narrative. AGENCY NARRATIVE The agency narrative provides an overview of the appropriations for that agency. Only a summary of legislative action for the agency, any agency-wide language, and a summary of other legislation having a significant fiscal impact on the agency are included at this level. All other discussion occurs within the relevant program narratives. Each agency narrative begins with a table detailing adjusted actual fiscal 2000 expenditures, and present law adjustments and new proposals added to derive the appropriation for each year of the 2003 biennium. The table is followed by a brief agency description. LEGISLATIVE FISCAL REPORT 2003 BIENNIUM 2 LEGISLATIVE FISCAL DIVISION APPROPRIATIONS BY AGENCY AND PROGRAM A paragraph with a short summary of legislative action follows. The paragraph is designed to alert the reader to any broad themes or major initiatives undertaken by the legislature. However, it is not designed to summarize all action. This section may be followed by a discussion of major issues pertaining to this agency and/or addressed by the legislature under the heading “Agency Narrative”. It is also within this section that any action impacting more than one program within the agency might be detailed. For example, a discussion of the highways state special revenue account in the Department of Transportation is included in this section. A table showing and a discussion detailing differences between legislative action and the Governor Martz Executive Budget (as published) is included. Finally, any agency-wide language included in HB 2 concludes this section (if applicable). Because the appropriation report details HB 2 appropriations, any other legislation that either appropriates money to or has a fiscal or programmatic impact on the agency is discussed in the section that follows. PROGRAM NARRATIVE The agency narrative is followed by narratives detailing each of the agency programs. The program narrative begins with a table showing the adjusted fiscal 2000 base used to derive the budget, followed by total present law adjustments, new proposals, and total appropriations, by fiscal year. A short program description follows. The program description is followed by a section detailing the program’s funding. This section may be followed by a “Program Narrative” section in which either a summary of action or discussion to highlight some aspect of the program budget is made. This section is followed by the "Present Law Adjustments" discussion. This narrative provides detailed information on all present law adjustments made to the base budget. The writeup begins with a table delineating the major present law adjustments, by fiscal year and funding source (showing both general fund and total funds). The table is divided into two sections: 1. statewide present law adjustments, which include most personal services adjustments (including vacancy Savings as initially recommended by Governor Racicot), and adjustments due to fixed costs and inflation/deflation (see discussion below); and 2. other present law adjustments specific to the program. The table is followed by a narrative, in which each significant adjustment is discussed in more detail. The "Present Law Adjustments" narrative is followed by the "New Proposals" narrative, which begins with a table listing each of the new proposals included by the legislature, by year and funding source. This table is followed by narrative discussing each new proposal in more detail. Any language included in HB 2 pertaining to the program concludes the “Program Narratives” section. STATEWIDE PRESENT LAW ADJUSTMENTS "Statewide Present Law Adjustments" are those adjustments applied globally to all state agencies. The factors of these adjustments generally affect all agencies and are beyond the control of the individual agencies. Because of the global application of these factors and the consistency of application among agencies, these adjustments are included in the "statewide" section of the present law adjustment table. PERSONAL SERVICES Personal services costs were derived by taking a "snapshot" of state employee positions and the factors determining compensation rates at a particular point in time. Personal services were then adjusted to incorporate costs in effect in fiscal 2001 and certain anticipated costs in the 2003 biennium. Four primary factors will cause LEGISLATIVE FISCAL REPORT 2003 BIENNIUM 3 LEGISLATIVE FISCAL DIVISION APPROPRIATIONS BY AGENCY AND PROGRAM an increase in costs from fiscal 2000 base expenditures: 1) incorporation of the 2001 biennium pay plan, which was not fully implemented until three months into fiscal 2001; 2) full funding of all positions, minus a three percent vacancy savings rate in the 2001 biennium for most agencies as initially recommended by Governor Racicot; 3) elimination of all termination pay that may have been incurred in fiscal 2000; and 4) incorporation of any upgrades or downgrades that occurred in fiscal 2000. In addition, some present law increases or decreases in FTE made by the legislature may be included in this portion of the table. As stated, the 2003 biennium pay plan, adopted by the legislature in HB 13, is not included in this or any other table. FIXED COSTS Agencies are charged fees (called fixed costs) for a variety of services provided by other state agencies. The legislature includes fixed costs for the following services (the object of expenditure is included in parentheses): Department of Administration (DofA) insurance and bonds (2104), DofA warrant writing fees (2113), DofA payroll service fees (2114), Legislative Auditor audit fees (2122), Statewide Accounting, Budgeting, and Human Resources System (SABHRS) operations bureau (2148), DofA network fees (2174), messenger services (2307), State Motor Pool (2510), DofA rent (2527), capitol complex grounds maintenance (2770), SABHRS debt service costs (2875), and state fund cost allocation plan (2895). Fixed costs total $70.9 million during the 2003 biennium for all funds (including non-appropriated proprietary funds). Table 1 shows the total fixed cost amounts in the 2003 biennium. Table 1 Due to the passage of HB 576 (1995 legislature), Fixed Costs* the agencies that pay these costs receive an 2003 Biennium (in Millions) appropriation in HB 2 for that purpose. However, Subcommittee/Agency Function Total the agencies providing the service do not require an General Government appropriation and are not included in HB 2, with the Administration Insurance & Bonds $16.714 | exception of audit fees. Instead, the legislature Veertapt Nuling. fires 1677 | establishes the rates the providing programs may Payroll Service Fees 0.727 ‘ é ; Nala Network Ganicas 18.836 charge. Each rate is discussed more fully in the SABHRS Operating 8 354 relevant program narrative in this section. SABHRS Bonds 4.520 Messenger Services 0.340 | Insurance and Bonds Rent - Buildings 8.941 : Tansporaied aft Baal iosens 5 875 The Risk Management and Tort Defense (RMTD) Legislative Audit Division ‘Audit Fees 9973 | Division of the DofA collects premiums from state Natural Resources and Commerce agencies for: 1) administration of the self-insurance Fish, Wildli&fP ear,k s Grounds Maintenance 0.6440 | program, which provides state agencies with general liability and automobile coverage; and 2) Various State Fund Allocation Plan 1.291 purchase of commercial policies for state agency Total $70.885 property, aircraft, and other risk coverage. Costs *All funds, including non-budgeted proprietary funds. are allocated to agencies based on actual loss experience and inherent exposure. Warrant Writing Fees DofA provides warrant writing and direct deposit services for agency financial transactions. The costs of these services are allocated to agencies based upon actual fiscal 1998, fiscal 1999, and fiscal 2000 (through May 2000) utilization of the various types of financial transactions. Payroll Service Fees The State Payroll program in DofA prepares and distributes payroll for all state agencies and operates the state payroll, personnel, and position control (PPP) system. Costs of these services are allocated to agencies based on the number of paychecks issued for each agency each year. LEGISLATIVE FISCAL REPORT 2003 BIENNIUM + LEGISLATIVE FISCAL DIVISION