Understanding the State Budget: Principles and Cycle

The State Budget

The State Budget is a forecast approved by the Parliament, detailing expected revenue and planned expenses for a specific fiscal year.

Key Features

• A representative document of public sector financial revenues and expenditures.
• An act of authorization and control by the legislature over the executive power.

Core Aspects

• Legal: Includes rules governing the relationship between legislative and executive powers regarding the budget cycle.
• Financial-Legal: Studies the effects of Budget Law on state spending and revenues.

Mechanisms

• Legislative Authorizations: Provides the public sector with necessary financial resources to fulfill its purposes.
• Legislative Rules: Operates in two ways: internal (regulating the exercise of financial authority regarding public spending) and external (rules affecting the legal situation of individuals in relation to the state).

Laws Governing the State Budget

The Budgetary Stability Law prohibits state expenditure from exceeding government revenue. The General Budget Law contains the necessary rules for the Finance Ministry to draft the annual budget bill.

Titles of the State Budget Law

• The State Budget
• Budgets of autonomous administrative agencies
• Social Security budget
• Budgets of state agencies
• Budgets of public agencies
• Budgets of state trading companies
• Budgets of state foundations

The Budget Cycle

• Instructions: Responsibility of the executive branch.
• Approval: Responsibility of the Parliament or legislature.
• Implementation: Managed by the government or executive power after legislative approval.
• Control: Monitored by the Court of Auditors, which reports to the legislative power.

Institutional and Timeframe Scope

The Institutional scope includes all national territorial entities, state companies, and institutional entities. The Timeframe for these budgets is strictly annual.

Preparation and Discussion

Instructions: Includes the Updated Stability Programme, reports on the cyclical position of the economy, Ministry of Economy and Finance orders, and agreements on budgetary stability and non-financial spending limits.

Discussion: Begins with the presentation of the draft Budget Law. The debate on the entire bill occurs in the full Congress to fix budget quantities. Following this, the project is forwarded to the budget committee. In the Senate, the discussion takes place in a plenary session, beginning with a debate on the entire bill, followed by a discussion of dissenting votes from the committee.