Glossary of budget-related terms

An independent budget and accounting entity with a self-balancing set of accounts representing all related resources, obligations and reserves. Most accounts are set up in state law to isolate specific activities.

An agency’s plan of estimated expenditures and revenues for each month of the biennium.

The legislative authorization to make expenditures and incur obligations from a particular account. Appropriations typically limit expenditures to a specific amount and purpose within a fiscal year or biennial timeframe.

A two-year fiscal period. The biennium in Washington runs from July 1 of an odd-numbered year to June 30 of the next odd numbered year.

Any additional cost (or savings) that occurs in the future because a budget item in the current biennium is not fully implemented. Example: A program started in the last six months of this biennium might cost $100,000. If that program operates for a full 24 months next biennium, costing $400,000, then the current biennium budget decision is said to have a bow wave of $300,000.

Economic or demographic factors that have a significant effect on the state budget. Examples: inflation rate changes or state population in certain age groups.

A legislative fiscal staff publication that summarizes the budget passed by the Legislature. This publication is usually distributed a few months after the end of the legislative session. Budget notes provide guidance but do not have the same legal implications as appropriation bill language.

The long-term financing and expenditure plan for acquisition, construction or improvement of fixed assets such as land and buildings.

Washington’s legal restriction (RCW 39.42.130) on the amount that can be paid for debt service on bonds, notes or other borrowed money. The Washington State Constitution (Article 8, Section 1(b)) mandates that payments of principal and interest in any fiscal year cannot exceed 9 percent of the arithmetic mean of general state revenues for the three preceding fiscal years. This debt limit of 9 percent of revenues is to be reduced in downward steps to 8 percent by July 1, 2034.

Accounts set up by law to receive revenue from a specific source and to be spent for a specific purpose.

A service or grant that, under state or federal law, must be provided to all eligible applicants.

A statement of the estimated fiscal impact of proposed legislation. This cost estimate is usually developed by the state agencies affected by the bill, and then approved and communicated to the Legislature by the Office of Financial Management.

A 12-month period used for budget and accounting purposes. The state fiscal year runs from July 1 through June 30 of the following year, and is named for the calendar year in which it ends (e.g., July 1, 2016, through June 30, 2017, is fiscal year 2017). The federal fiscal year runs Oct. 1 through Sept. 30.

(FTE). As a unit of measure of state employees: refers to the equivalent of one person working full-time for one year (approximately 2,088 hours of paid staff time). Two persons working half-time also count as one FTE. As a unit of measure of students in K-12 or higher education facilities: refers to the equivalent of one student attending class full-time for one school year (based on fixed hours of attendance, depending on grade).

The general fund represents all financial resources and transactions not required by law to be accounted for in other accounts. GF-S refers to the basic account that receives revenue from Washington’s sales, property, business and occupation, and other general taxes, and is spent for operations such as public schools, social services and corrections.

Bonds whose repayment is guaranteed by the “full faith and credit” of the state.

Government Management, Accountability and Performance was a management initiative to improve the results of state government. Agency directors reported in regular meetings with the Governor on the most important management and policy challenges. Reports focused on performance in measurable terms. GMAP was closed out April 24, 2013, to transition to Results Washington.

Any budget development approach that focuses on incremental changes to a previous spending level or other defined expenditure base.

A law on state budget restrictions approved by voters in the November 1993 general election. Its primary requirements are an expenditure limit based on inflation and population growth (applicable to GF-S expenditures only); an emergency reserve account for any GF-S revenues above the expenditure limit; a percentage limit on how much state fees can be raised without legislative approval; and a two-thirds legislative vote requirement on certain state tax increases. The Legislature temporarily suspended the state expenditure limit through the beginning of the 2019-21 Biennium. With the passage of SSB 6660 during the 2020 legislative session, as of July 1, 2020, the state expenditure limit is repealed and the State Expenditure Limit Committee has been dissolved.

Lean is a systematic approach to improving value to customers by eliminating waste. The focus is on the customer and the work steps (or “value stream”) that create products or services for customers. Lean thinking, tools and techniques offer an opportunity to streamline business processes to save time, effort and money that can be better used on what customers value most.

A projected expenditure level representing the estimated cost of providing currently authorized services in the ensuing biennium. It is calculated using current appropriations, the bow wave of legislative intentions assumed in existing appropriations (costs or savings) and adjustments for trends in entitlement caseload/enrollment and other mandatory expenses. This number establishes a theoretical base from which changes are made to create a new budget.

Moneys that can be expended without legislative appropriation. Only funds in accounts specifically established in state law as being exempt from appropriation fall into this category.

A biennial plan for the revenues and expenditures necessary to support the administrative and service functions of state government.

A quantitative indicator of how programs or services are directly contributing to the achievement of an agency’s objectives. These indicators may include measures of inputs, outputs, outcomes, productivity and/or quality.

(POG). Washington’s adaptation of the “Price of Government” budget approach first developed by Peter Hutchinson and David Osborne. This form of budgeting focuses on statewide results and strategies as the criteria for purchasing decisions.

Language in budget bills that places conditions and limitations on the use of appropriations. Example: “Up to $500,000 of the General Fund-State appropriation is provided solely for five additional inspectors in the food safety program.”

Capital budget appropriation that reauthorizes the unexpended portion of previously appropriated funds. Capital projects often overlap fiscal periods, and it is necessary to reauthorize some expenditure authority to ensure project completion.

In budget terminology, the difference between budgeted resources and expenditures.

Results Washington combines the best aspects of previous performance management and performance budgeting efforts such as Government Management, Accountability and Performance and Priorities of Government with a significantly expanded Lean initiative that involves all state agencies.

Unused appropriation authority. If an agency does not spend all its appropriation in the time frame specified by the budget, the authorization to spend that dollar amount expires.

(RCW). The Revised Code of Washington is the compilation of all permanent state laws now in effect. It is a collection of session laws (enacted by the Legislature and signed by the Governor, or enacted via the initiative process), arranged by topic, with amendments added and repealed laws removed. It does not include temporary laws such as appropriations acts.

Any legislative change to the original budget appropriations.