Present law provides that if for any reason a budget ordinance is not adopted prior to the beginning of the next fiscal year, then the appropriations for the last fiscal year becomes the appropriations for the next fiscal year, until the adoption of the new budget ordinance. This bill removes this provision and, instead, determines the budget as described below. If the municipal legislative body and the governing body of a local education agency LEA established by a municipality ("LEA") fail to agree upon a budget for the LEA by August 31 of any year, then, by operation of law, this bill provides that the budget for the LEA is equal to the minimum budget required to comply with the local match and maintenance of effort provisions of the TISA. However, if for three consecutive fiscal years the municipal legislative body and the governing body of the LEA fail to agree upon a budget and the LEA receives the minimum required funding for that fiscal year in accordance with these provisions, then the budget for the LEA for the third fiscal year must include a mandatory increase that is equivalent to 3% of the required funding from local sources for schools. However, this increase is not required if during any of the three consecutive fiscal years the governing body of the LEA failed to submit its budget proposal to the municipal legislative body by May 1. If a municipal legislative body has not adopted a budget by the first day of any fiscal year, and until a final operating budget is adopted, this bill generally provides that the operating budget for the fiscal year just ended and the appropriation ordinance for the fiscal year just ended continues in effect by operation of law without further action of the municipal legislative body. However, all agencies of the municipality and other entities receiving appropriated funds must not, during any month, encumber funds in excess of the allotment for a comparable month of the preceding fiscal year, unless specifically authorized to do so by ordinance of the municipal legislative body. The authorizing ordinance must identify a corresponding funding source equal to the amount of any excess allotment authorized. Any excess allotment authorized becomes part of the final operating budget. During the time that the continuing operating budget is in effect, the budget may be amended in accordance with the procedures for amending a final operating budget, and amendments may be made as necessary to provide for debt obligations and court-ordered expenditures. This bill authorizes the continuing operating budget authorized above to continue in effect for the first two months of the fiscal year and, upon approval from the comptroller of the treasury or the comptroller's designee after a showing of extraordinary circumstances, may continue for the third month of the fiscal year. However, a continuing operating budget must not extend beyond the last day of the third month of the fiscal year. The municipality must submit its justification for extending the continuing operating budget through the third month of the fiscal year to the comptroller or the comptroller's designee for approval by the 15th day of the second month of the fiscal year. The comptroller or the comptroller's designee may request additional information deemed necessary to properly review the continuing operating budget extension request. The comptroller or the comptroller's designee must report the comptroller's approval or disapproval to the municipal legislative body within seven business days from the date on which the request was received or the date on which any requested supplemental documentation was received, whichever is later, at which time the municipal legislative body may take action to extend the continuing operating budget for the third month of the fiscal year.

Statutes affected:
Introduced: 6-56-210