Actual Budget: The budgeted expenses and revenues of the base year as adjusted to reflect those experienced.
Agency Budget Request: The budget request prepared by state agencies, due to the Department of Budget and Management in September or October, that is based on an agency’s expected revenues and proposed expenditures as a result of the agency’s statutory and legislative mandates, goals and objectives, costs, and priorities.
Appropriation: The amount of spending for a program legally authorized by the General Assembly.
Appropriated Positions: Synonymous with “authorized positions” (see below).
Authorized Positions: The number of full-time equivalent employees that may be employed at any one time on the regular State payroll. The number of authorized positions includes vacant positions. An agency may not exceed its total of authorized positions. Authorized positions for a given fiscal year are enumerated in that year’s budget. Only the State’s Board of Public Works may increase the number of authorized positions during the fiscal year.
Budget Amendment: A proposal to change the dollar amount of an appropriation after the budget has already been passed by the General Assembly.
Budget Bill: Presents the Governor’s allowance as a bill that will become the legally enacted budget after the General Assembly approves it, including any amendments.
Budget Books: A series of volumes published each January that present the Governor’s allowance to the General Assembly for all appropriated programs in the budget as well as information on non-budgeted agencies.
Budget Book Appropriation: Reflects the Legislative appropriation plus or minus amendments approved during the fiscal year preceding the year of the budget submission. The amount appears in the annual Budget Books.
Budget Cycle: A period of time in which a specific budget is affected, usually 12 months. See fiscal year.
Budget Unit: A department, board, commission, office, institution, or other unit of organization that has, under general law, an independent existence, and thus is authorized to receive and expend an appropriation. A department or agency may have one or more budget units in the Appropriations bill.
Capital Expenditure: An expenditure for the acquisition or construction of buildings or other fixed assets, or for other tangible assets with a useful life of at least fifteen years.
Contract: A formal agreement, with appropriate approvals, between the State and an independent contractor for outside vendor services or products.
Contractual Positions: The number of full-time equivalent employees working under employment contracts. Agencies generally use contractual employees for tasks of a limited duration or seasonal nature. Contractual employees are not eligible for most state fringe benefits.
Contractual Services: Services provided by a business, organization, or individual who is not a state employee such as: communication, printing, advertising, utilities, repairs, equipment rentals or lease/purchases, and professional services.
Cost of Living Adjustment (COLA): Salary increases to reflect increases in the cost of living which are based on negotiations rather than merit or longevity.
Current Restricted Funds: Funds that may be used by higher education institutions only for restricted purposes. These consist principally of research grants and donations for particular purposes (i.e., student aid).
Current Unrestricted Funds: Funds that may be used by higher education institutions without restriction. These consist principally of the State appropriation, tuition and student fees.
Dedicated Funds: Funds collected from a specific revenue source that must be appropriated for a specific expenditure. An example is motor fuel tax funds, which must be constitutionally appropriated for programs related to providing and maintaining an adequate system of public roads and bridges.
Deficiency Appropriation: An appropriation for an expense in the current fiscal year that is not covered by the existing budget. Deficiency appropriations usually occur when workloads exceed projected amounts, new legislation requires expenditures not provided in the budget or unanticipated needs arise. The FY 2012 budget proposal includes deficiency appropriations for FY 2011.
Encumbrance: A commitment against allotment for legally binding purchase orders and contracts representing goods and services which have not yet been received. Encumbrances become expenditures and liabilities only when the goods and services are actually received.
Entitlement Programs: Certain programs, usually federal in origin, that provide benefits to individuals based on specific eligibility requirements. Medicaid is the largest entitlement program operated by the state.
Expenditure: Cash paid or to be paid for the purchase of an item or for a service performed.
Federal Funds: Grants and other payments from the federal government that are expended through the State budget to fund various activities funded by the Federal Government. Such funds are subject to applicable federal laws and regulations. Federal funds often require a State funding match. Before an agency can spend these funds, its budget must contain a Federal Fund Appropriation for at least the amount of funds to be spent. Medicaid and transportation programs are the largest sources of federal funding in the State budget.
Fees: Charges associated with using a particular service provided by state government to its citizens. The charge generally recovers the cost of providing the service. Examples include state park receipts and license registration renewal.
Fiscal Digest: Book published annually by July 1 that lists the appropriations enacted by the General Assembly in the State Budget for the new fiscal year. The Fiscal Digest also contains other budgetary information for the enacted budget.
Fiscal Year (FY): The calendar on which the state operates for financial purposes. Maryland’s fiscal year begins on July 1 and ends on June 30; thus, fiscal year 2014 (FY 2014) begins on July 1, 2013 and continues until June 30, 2014.
Formula Program: A program with specific eligibility standards which guarantees a specific level of benefits for any recipient who qualifies. The eligibility standards and benefits must be based in statute.
Fringe Benefits: Benefits that are provided to state employees over and above their salaries as an inducement to employment. These benefits include retirement, health insurance, and employer Social Security contributions.
Full-Time Equivalent (FTE): A method of calculating employment, workloads, enrollments or caseloads to adjust for part-time or part-year participation. For example, part-time or part-year employees are factored according to the share of a full 2,080-hour year during which they are employed. A seasonal employee who works twenty hours a week for one-half of the year would count as a 0.25 full-time equivalent.
Fund: A separate accounting entity, maintained for a particular purpose, for which transactions are subject to legal or administrative restrictions. This term is distinguished from "funding" or "funds," which usually refer to the amount of dollars contained in a fund.
General Fund: State funds that may be used for any activity of the State. State income and sales tax revenues are the primary sources of General Funds. About half of State spending is attributable to the General Fund.
Governor’s Allowance: The amount proposed by the Governor for a program or an item in the State budget. In most instances the General Assembly may subtract from but may not add to the allowance. Department of Budget and Management analysis informs the gubernatorial decision process that results in the amount included in the budget books, budget files and budget bill submitted to the General Assembly.
Grants: Funds disbursed by the state directly to units of local government, non-profit corporations, and to individuals for specific purposes.
Indirect Costs: Overhead expenditures which cannot be directly charged to the program providing services. Indirect costs represent administrative and support services an agency provides (such as budgeting, accounting and purchasing) to allow the direct delivery of services.
Lapsed Funds: Uncommitted funds that remain in an appropriation account at the close of a fiscal year. They are returned to the fund from which they were originally appropriated or allocated.
Maintenance of Effort (MOE) Requirements: A requirement by the federal (or state) government that the state (or local) continue funding certain programs at a certain level, usually the same funding level as in the current or a prior year, in order to receive federal (or state) funds.
Managing for Results (MFR): Began in 1999 and codified in Chapter 452 of 2004, this is a strategic planning process intended to institute performance measurement techniques for all State government programs.
Memorandum of Understanding (MOU): Agreements which are often used between state agencies in contracting for goods or services or for establishing policies and procedures.
Non-budgeted Funds: Some agencies have independent authority to make expenditures without legislative appropriations. Examples include the Injured Workers’ Insurance Fund (which provides workers’ compensation insurance) and the Maryland Transportation Authority (which operates certain bridges, tunnels and other transportation facilities). These agencies have independent revenue sources (i.e., insurance premiums, toll revenues), and their budgets are presented in the budget books for information purposes only.
Object Class: A grouping of similar expenditure items that form the basis of appropriations and records of expenditure. Examples include “travel”, “contractual services”, and “supplies and materials”.
Operating Budget: A plan for the yearly distribution of state resources for the ongoing operations of state programs. Operating budget appropriations are made for one fiscal year and any unexpended or unobligated funds lapse, i.e., revert to the fund from which they were appropriated, at the end of the fiscal year.
Operating Expenditure: As distinguished from “capital expenditures,” are expenses of ongoing operations of government and other expenditures that do not result in a tangible fixed asset with a useful life of at least fifteen years.
Performance Measures: Measures show progress toward the accomplishment of objectives and provide the yardstick by which programs are evaluated. Measures describe effectiveness, efficiencies, or output of programs.
Position: An authorized job slot. Since a position may or may not be filled, a position is not equivalent to an employee.
Program: The level at which the General Assembly usually appropriates. Programs are related to the operating functions of an agency, for example, general operations, Office of the Secretary, etc.
Reimbursable Funds: Funds transferred among agencies as payments for services provided by one agency to another. For example, each operating agency pays the Department of Information Technology (DoIT) for the actual cost of its telephone usage from its general, special or federal funds. DoIT, in turn, pays the telephone service provider with reimbursable funds. State appropriations count only the general, special, and federal funds that agencies expend to the Department of Information Technology for telephone service, thereby avoiding any double-counting.
Revenues: Taxes, fees and sales, etc. that are collected by the state and are available for expenditure in a budget recommended by the Governor and approved by the General Assembly.
Reversion: The balance of an appropriation or authorization that is remaining after the close of a specific time period that are returned to the original source of the appropriation or authorization.
Special Funds: Revenues dedicated to a specific purpose, such as licensing fees or certain tax revenues that may only be used for the purposes designated by law. For example, property transfer tax revenues are dedicated to Program Open Space and other specific uses. Similarly, the Transportation Trust Fund, a special fund, is supported by fuel tax and other transportation-related revenues.
State Aid: Grants and other funding provided by the State government to assist cities, counties, public schools, and other allied groups in providing various services and programs to the citizens of Maryland.
Sub-object Class: The lowest level of detail used in recording expenditures. For example, “office supplies” is a sub-object included in the object “supplies and materials”.
Subprograms: Activities required to accomplish specific goals at the expenditure level. If a program was to provide services for disabled, elderly, and children, then these would be subprograms.
Supplementary Appropriation: Supplementary appropriation bills allow the General Assembly to create new appropriations, but only if the tax revenue necessary to pay for the appropriation is included in the bill.
Turnover Expectancy: An amount calculated to determine the savings projected to occur in each year of the biennium in the personnel services category due to vacancies. The calculation is based on historic vacancy percentages by budget account and applied against salary and fringe benefits costs.
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