Guide to Budget Terms
The Guide to Budget Terms provides some ‘user friendly’ descriptions of State government and definitions of financial terms as included in OpenBudget NY.
- Functional Area
- A grouping of State agency spending by general programmatic purpose. For example, the functional area of higher education includes spending for SUNY, CUNY, and the Higher Education Services Corporation.
- Fund Type
- These include the General Fund, which is the primary operating fund of the State; Special Revenue Funds, which account for State receipts from specific revenue sources and are legally restricted to disbursement for specified purposes; and Capital Funds, which finance capital construction costs. The sum total of the various funds is considered All Funds.
- Financial Plan Category
- These are the major spending categories of the State, crossing all functional areas. For example, personal service costs are for salaries and non-wage compensation for State employees and certain payments to non-State employees.
Fund Type Descriptions
The State records its transactions in the following fund types:
All Governmental Funds
- General Fund
- This is the major operating fund of the State. It receives all State income not earmarked for a particular program or activity and not specified by law to be deposited in another fund. State income for Financial Plan purposes consists of moneys (taxes, fees, and miscellaneous receipts including certain repayments of State advances) deposited to the credit of the General Fund during the fiscal year and transfers from other funds from current revenues.
- Special Revenue
- These funds account for State receipts from specific revenue sources and are legally restricted to disbursement for specified purposes. This governmental fund type is divided into two classifications: (1) State Special Revenue Funds and (2) Federal Special Revenue Funds. An example of a State Special Revenue Fund is the Conservation Fund which finances a number of State environmental programs. An example of a Federal Special Revenue Fund is the Health and Human Services Fund. Although any earmarked revenue fund is treated as a Special Revenue Fund for cash-basis budgeting and reporting purposes, some are combined with the General Fund for purposes of reporting on the basis of GAAP.
- Debt Service
- All tax-financed State debt service on long-term debt and payments on certain lease-purchase or other contractual obligations are paid from Debt Service funds. These account for the accumulation of money for, and the payment of principal and interest on, general long-term debt. Lease-purchase payments for State University, Health and Mental Hygiene facilities under contractual agreements with public authorities are also paid from funds classified as Debt Service funds. Debt service on highway bonds supported by dedicated highway revenues is also reflected in this fund type. Sources of revenue for this fund type include transfers from the General Fund, dedicated taxes, and other revenues.
- Capital Projects
- These funds finance a variety of capital construction costs including:
- planning, land acquisition, design, construction, construction management and supervision, and equipment costs;
- highway, parkway and rail preservation projects; outdoor recreation and environmental conservation projects, and buildings and other capital facilities required by various State departments and agencies;
- payments to local governments to help finance their capital programs, including highway, parkway, bridge, mass transportation, aviation, economic development, port development, community college, community and State mental health, outdoor recreation, State-assisted housing, and environmental quality; and
- advances for capital construction costs reimbursable by public authorities, instrumentalities of the State, the Federal government or local governments. Sources of revenue for this fund type include transfers from other State funds including the General Fund, dedicated taxes and other revenues, reimbursement of advances, bond proceeds, and Federal capital grants.
State Operating Funds
The State Funds operating budget comprises the General Fund and other State-supported activities financed by dedicated revenues in State Special Revenue funds, as well as Debt Service funds accounting for the payment of debt service on all tax-financed State long-term debt. All capital spending, regardless of financing source, is included in the Capital budget.
- Internal Service Funds
- Account for the financing of goods or services supplied by one State agency to other State agencies or governmental units on a cost-reimbursement basis.
- Enterprise Funds
- Account for operations that are similar to private business enterprises.
- Private-Purpose Trust Funds
- Accounts for all trust arrangements under which principal and income benefit individuals, private organizations, or other governments.
- Pension Trust Fund
- Accounts for the cash-basis results of operations for the administrative portion of the State’s Common Retirement Fund. It does not reflect investment activity, balances, or other assets available to this Fund. In addition, pension contributions and payments to retirees are excluded since these payments are not required to be appropriated.
- Agency Funds
- Accounts for funds held by the State in a purely custodial capacity. Cash is held temporarily until disbursements are made to individuals, private organizations, or other governments.
Disbursement Descriptions (Financial Plan Category)
The State’s Financial Plan and reporting includes only those payments made pursuant to an appropriation and paid from funds available in the State Treasury. All State spending is classified in one of the following categories:
- Local Assistance Grants
- Include payments to counties, cities, towns, villages, school districts and other local entities, as well as certain financial assistance to, or on behalf of, individuals and nonprofit organizations.
- Personal Service
- Includes the payment of salaries and compensation for State employees.
- Non-Personal Service
- Includes payments for miscellaneous contractual obligations, supplies and materials, travel, rentals and repairs, utilities, postage and shipping, printing, telephone, and other operating costs.
- General State Charges
- Include costs mandated by statute, collective bargaining agreements or court order. Charges in this category can be further subdivided into the following:
- Fringe Benefits: Contributions to pension systems, the employer’s share of Social Security contributions, employer contributions toward the cost of health insurance, workers compensation and unemployment insurance, and contributions to union employee benefit funds which provide vision care and other services.
- Fixed Costs: For State payments in lieu of taxes, as well as payments for local assessments on State-owned land, judgments against the State pursuant to the Court of Claims Act, defense(s) by private counsel or alternatively payments on behalf of State officers and employees in civil judicial proceedings.
- Debt Service
- Include payments made for tax-financed State debt service on long-term debt; contractual-obligation and lease-purchase arrangements with several public authorities and municipalities; and lease-purchase payments for State University, Health, and Mental Hygiene facilities.
- Capital Projects
- Include payments made for the acquisition or construction of the State’s capital facilities. Included in this category are:
Advances are made for capital construction costs reimbursable by public authorities, the Federal or local governments, or from the proceeds of State bond and note sales.
- planning, land acquisition, design, construction, engineering services, and equipment costs attributable to highway, parkway and rail preservation projects;
- outdoor recreation and environmental conservation projects;
- payments to local government units and public authorities to help finance highways, parkways, bridges, mass transportation, aviation, economic development, port development, community colleges, community and State mental hygiene buildings, outdoor recreational parks, correctional and State-assisted housing as well as environmental quality projects.
- Statutory authorization to make expenditures during a specific State fiscal year and to make disbursements for the purposes designated up to the stated amount of the appropriation. Appropriations are authorizations, rather than mandates, to spend. Disbursements need not, and generally do not, equal the amount of the appropriation from which they were made since less than the full amount of the appropriation is usually spent within the fiscal year to which it pertains. In New York, all appropriations are classified in one of the following four categories:
- State Operations - This category relates to appropriations for the operation of State agencies, regardless of fund source. For example, an agency may have appropriations in several different funds (or accounts within funds) and all of these appropriations would be categorized as “State Operations.”
- Aid to Localities - This category includes all appropriations for aid to localities, regardless of fund source.
- Capital Projects - When used as a category of appropriation, “Capital Projects” includes all appropriations for capital construction projects, regardless of fund source.
- Debt Service - This category includes all appropriations for State debt service on long-term debt; contractual-obligation and lease-purchase arrangements with several public authorities and municipalities. This also includes appropriations for interest rate exchange and similar agreements.
- Available Appropriations
- Appropriations available for the current fiscal year. Adjustments, such as the recommended transfer of a program or an item to another fund or agency for the next fiscal year, are included to provide for year-to-year comparability.
- Recommended Appropriations
- Appropriations recommended for the next fiscal year. As explained above, appropriations represent an authorization to incur spending obligations during the fiscal year, up to the specified amount. Cash payments for those obligations may occur during the fiscal year of the appropriation or during the first part of the ensuing fiscal year.
- A prior-year or current-year appropriation which will not be fully spent by the end of the current fiscal year and which has been recommended for extension. Reappropriations are commonly used in the case of federally funded programs and capital projects where the funding amount is intended to support activities that may span several fiscal years. For example, funds for capital projects are customarily recommended and appropriated in amounts sufficient to cover the total estimated cost of all phases of a specific project (such as land acquisition, design, and construction). As contracts within each phase are established, portions of the capital construction appropriation are allocated and disbursements are made to meet the actual costs incurred as each phase of the project progresses. In ensuing years, the balances not disbursed are reappropriated to cover the costs of subsequent construction phases in the project.
- A mechanism for reserving all or a portion of an appropriation for future expenditure. Entering into a contract usually requires an encumbrance, although the funds will be expended or disbursed over a period of several months. Encumbrance accounting enables management to avoid spending in excess of authorized appropriations.
- Capital Program
- Programs in the Capital Projects category are known as Comprehensive Construction Programs (CCP). The program titles in the Capital Projects category usually differ from the program titles used in the State Operations and Aid to Localities categories. Some CCPs represent broad categories, such as Design and Construction Supervision, while others may correspond to specific agency programs.
- Reference Number
- The reference number includes eight characters assigned by Division of the Budget examiners to identify every capital appropriation. It is required by State Finance Law.
- State Purpose
- A standardized functional classification category of all capital projects.
- Financing Source
- Funding for capital purpose which includes transfers from other State funds including the General Fund, dedicated taxes and other revenues, reimbursement of advances, bond proceeds, and Federal capital grants.
- Indicates the chapter section and year in which the appropriation was enacted.
- A short title, name or purpose for the appropriation.
Other Miscellaneous Terms
- A subdivision of a fund type that refers to a group of subfunds whose resources are set apart for a specific objective.
- A subdivision of a fund that refers to a classification by which information on particular financial transactions and financial resources is recorded and arranged.
- Each agency has a program structure which is described in its narrative presentation (need hyperlink to agency presentation book) . Each of the agency’s activities falls within a program, and each program may have appropriations from one or more fund types.
- Full Time Equivalent (FTE)
- A unit of measure which is equal to one filled, full-time, annual-salaried position. The table provides a point in-time projection of filled, full-time, annual salaried positions. In understanding the definition of FTE, it is important to note that the FTE is a unit of measure which identifies filled, full-time, annual salaried positions rather than people.
The following three examples illustrate this concept:
In total, the above three examples indicate that 5 people are employed within State service, but since 4 people work half-time, only 3 FTEs are counted.
- 1 person serving in 1 position at 100 percent time (full-time) = 1 FTE
- 2 people sharing 1 position, each at 50 percent time (half-time) = .5 FTE + .5 FTE = 1 FTE
- 2 people serving in 2 positions, each at 50 percent time (half-time) = .5 FTE + .5 FTE = 1 FTE