Changes in Local Budget Law Coming Your Way in January 2012

For most Oregon local governments it may seem early to be discussing annual budget development, but recently adopted House Bill (HB) 2425 makes several changes to ORS 294.305 to 294.565, most commonly known as Local Budget Law.  These changes affect, in part, budget development, supplemental budgetary changes, public notice provisions, and budget document requirements.  These changes take effect January 1, 2012. One of the notable changes in HB 2425 is the addition of a new circumstance triggering a supplemental budget action.  A reduction in available resources that requires the governing body to reduce appropriations in the original budget, or previously approved supplemental budget, now triggers a supplemental budget; previously only an increase in resources triggered a supplemental budget.  The appropriate supplemental budget process continues to be determined by whether a supplemental budget action will increase expenditures by less than or more than 10 percent.

Other changes to Local Budget Law include new requirements for detailed categories of estimated budget requirements.  For instance, ORS 294.352(5) now requires estimates for personnel services to show the total cost for each organizational unit or activity, and the total full-time equivalent (FTE) positions for each.  ORS 294.401(5) notice requirements for budget committee meetings is now allowed by two separate publications in a newspaper, or one publication in a newspaper in addition to posting the notice on the local government’s website.  Significant amendments were made to information required in the financial summary of the published budget document.  Briefly, amendments include additional detail about resources, additional information about expenditures and FTEs per program or organization unit, the addition of a narrative explaining budget changes from the previous year, and additional detail regarding taxes imposed by the local government.

HB 2425 amendments to Local Budget Law are extensive and local governments are advised to become familiar with such amendments sooner rather than later.  A copy of the bill can be obtained at http://www.leg.state.or.us/11reg/measpdf/hb2400.dir/hb2425.en.pdf. If you have specific questions, you may always contact your local government attorneys here at BEH.