Tips for understanding the mumbo jumbo of Alaska budget

Glossary of Budget Terms

Even if you’re not a numbers geek you’ll likely find something interesting and readable about the state’s Fiscal Year 2015 and the 2016 budgets on the Office of Management and Budget’s website.

I’ve had lots of fun reading through them and encourage you to do likewise. Now before you freak out about all that budget mumbo jumbo and those huge dollar amounts, let me remind you of “Maggie’s Rule for Reading Legislative Stuff”.

Go to the site, glance around for something that catches your eye and skim through it. If it’s interesting and makes sense great, you’ve learned something new. If it’s boring or totally incomprehensible, skip it. Don’t feel guilty or dumb or anything, just move on. There are plenty of pages and lots of really cool stuff on the state’s website, so feel free to cherry-pick your reading material.

Speaking of reading material. I found an informative glossary of budget words on the OMB’s website. Let’s look at some of those words.

First of all Office of Management and Budget which is also called OMB. That’s the division within the Governor’s Office that is responsible for preparing the Governor’s budget. That explains why all the budget information and assorted attachments and background info is posted on the OMB website.

Appropriation is a word we hear a lot of as is allocation and they work together. An appropriation is the statutory authorization to spend a specific amount of money for a stated purpose. Funds may not be spent without an appropriation made by law and it’s the Alaska Legislature that makes those laws. I especially like the phrase “a specific amount of money for a stated purpose”.

An allocation is a sub-unity of an appropriation in appropriation bills. In other words, the legislature states this amount of money will be spent on this specific purpose, and the allocation makes guidelines for divvying the money up, but generally doesn’t micromanage.

And finally, one more appropriation related term lapse. Lapse is the expiration of the authorization to spend funds. Used in a sentence…Operating appropriations lapse at the end of the fiscal year unless otherwise specified. In other words spend it or lose it.

These Budget Terms come from a glossary on the OMB’s website where you’ll find info on all kinds of things related to the state’s budget.

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Resources:

Glossary of Alaska Budget Words

A listing of words that you may want to have around when reading the state’s budget. Mostly, the glossary is easy to understand, though there are a few phrases that only an accountant could understand.

Alaska Office of Management and Budget (OMB) page with info on Alaska Operating and Capital Budgets and other budget information