TO: Department Directors, Deputy Directors, and Budget Officers

FROM: Marty Drewel

DATE: July 14, 2008

RE: Fiscal Year 2010 Budget Instructions

Summary of Highlights and Major Changes to Instructions

1. Fiscal Outlook – Fiscal Year 2008 ended with general revenue collections growth of 3.7% above the revised consensus revenue estimate of 3.1%. While current national economic conditions remain stagnant as evidenced by the housing market retreat, tight credit, the uncertainty in citizen's equity wealth, and rising prices, it is expected that the economy will return to average growth late in calendar year 2009; however, the downside risks are large and numerous. Should economic conditions not meet expectations, the FY 2009 ending balance of nearly $340 million will be sufficient to cover any shortfalls, meaning that this year's budget will remain manageable, but the Fiscal Year 2010 budget could be challenging. Further, revenue growth rates are below recent rates of inflation, suggesting that after mandatory increases are considered, limited discretionary general revenue will be available for Fiscal Year 2010.
   
   
2. Timely submission - It is essential that agencies submit completed budget requests by October 1st as required by state statute. Leasing information must be provided to OA Facilities Management, Design and Construction by September 1st in order for them to have work completed for the October 1st submission.
   
   
3. Transition - The Fiscal Year 2010 budget will reflect the recommendations of the Governor-elect. Section 33.260 RSMo requires that the Division of Budget and Planning to render all possible assistance in the preparation of the budget to enable the Governor-elect to discharge effectively his/her budget responsibilities upon assuming office.
   
   
4. Combined Budget Forms - Departments are encouraged to combine requests on a single budget form when doing so will facilitate decision making (e.g. funding changes that impact multiple budgeting units). See Attachment #1 for more information.
   
   
5. Missouri Sunset Act - Programs created after passage of the Missouri Sunset Act in 2003 will have to be extended or face extinction beginning next year. Yet another form has been created to serve as an aide in tracking which programs have a sunset clock. See Attachment #3.
   
   
6. Information Technology Items - Requests of funds for information technology items will continue to be coordinated with the Information Technology Services Division in the Office of Administration. Requests for new funds for agencies that are part of the information technology consolidation must come from the Information Technology Services Division. Appropriations containing minor IT costs will be made directly to the agency, with transfers of on-going costs to ITSD in Fiscal Year 2011.
   
   
7. Replacement of Vehicles - While the Office of Administration, State Fleet Management Program will continue to approve vehicle purchases and supply information about the state fleet to the administration and the general assembly, all requests for vehicles in FY 2010 will appear in agency budgets. A statewide decision item number has been created to be used for replacement vehicle requests.
   
   
8. Fuel Inflation - Statewide decision item numbers have been set aside to be used for FY 2009 supplemental requests and for FY 2010 cost-to-continue requests for the increased costs of providing vehicle fuel. Detailed instructions are included in Attachment #7.
   
   
9. Pay plan - At this time, agencies should not include any budget requests for pay increases in their Fiscal Year 2010 budget submission. Additional instructions may be distributed after the release of the Personnel Advisory Board's pay recommendations.
   
   
10. Reorganizations - Agencies must consult with Budget and Planning prior to conducting any reorganization within their department. Major reorganizations must be approved by the Governor and submitted to Budget & Planning prior to making changes in the budget. Because the FY 2010 budget will be presented by a new Governor, there will be no major reorganizations in the October 1 submissions.
    
    
11. Capital Improvements - The capital improvement budget is a biennial appropriation for Fiscal Years 2010 and 2011. Facilities Management Design and Construction (FMDC) personnel will share potential maintenance and repair and new construction capital budget requests generated by the Facility Assessment Database with various agencies by July 15th. Between July 15 and August 15, FMDC will organize and prioritize packaged requests and again meet with agencies for review. During August 15 to September 15, agencies will review packaged request reports, assign department priorities and send their responses back to their FMDC Program Manager. Between September 15 and October 1, FMDC personnel will perform final reviews of requests with input from agency personnel and then perform budget analysis for inclusion in FMDC's recommendations to Budget & Planning.
    
    
12. Web-ready Budget Books - The January budget requests with Governor's recommendations will again be made available on the Internet. Please be sure to include a table of contents to make this on-line document more user-friendly.
    
    
13. Organization Chart - Executive branch agencies should submit an electronic copy of their organization chart, complete with, at a minimum, the salaries and employee names of persons considered to be part of your management team.
    
    

LIST OF ATTACHMENTS TO FY 2010 BUDGET INSTRUCTIONS