SB 503

Under current law, the Department of Administration (DOA) is required to

submit, as part of the biennial budget report, a comparison of the state's budgetary

surplus or deficit according to generally accepted accounting principles (GAAP), as

reported in any audited financial report prepared by DOA for the most recent fiscal

year, and the estimated change in the surplus or deficit based on recommendations

in the biennial budget bill or bills. GAAP are those principles for state and local

governments adopted by the Governmental Accounting Standards Board (GASB).

Organized in 1984, GASB is an independent organization founded to establish

standards of financial accounting and reporting for state and local governmental

entities. Its standards generally guide the preparation of external financial reports

of those entities.

This bill provides that, for the fiscal biennium occurring after the fiscal year in

which DOA determines that the state does not have a budget deficit according to

GAAP, and each fiscal biennium thereafter, the biennial budget bill or bills must be

prepared according to GAAP. In addition, the bill provides that no executive budget

bill or bills may increase the state's budget deficit, if any, according to GAAP, as

reported in any audited financial report prepared by DOA.

Finally, under the bill, beginning on July 1, 2013, if there is in any fiscal year

a state budget deficit according to GAAP, as reported in any audited financial report

prepared by DOA, each house of the legislature must pass legislation to reduce the

budget deficit by the lesser of $100,000,000 or the entire amount of the deficit.