Revised: 12/02/2019
The State of Ohio's biennial Capital Budget, typically enacted in each even-numbered year, provides appropriations for the acquisition, construction/reconstruction, and renovation of capital assets of state agencies, colleges, universities and school districts. In most years, funds are also appropriated for community projects of local or regional interest. Funding for state highways, bridges and other transportation construction has been historically appropriated through the biennial transportation budget, enacted in odd-numbered years. Funding for most capital projects is provided by the state through the issuance of long-term debt. In some cases, available cash balances in various state funds are appropriated for capital purposes.
The process of enacting a biennial Capital Budget, which begins many months prior to introduction of a capital appropriations bill in the General Assembly, occurs within the context of another activity — preparation of the state's six-year Capital Improvements Plan under ORC 126.03. This plan is updated biennially by OBM on the basis of recommendations it receives from affected state agencies. The process begins in the early fall of each odd-numbered year, when OBM distributes guidelines to the agencies for the preparation of both the Capital Budget and the six-year Capital Improvements Plan.
As with the biennial Operating Budget, OBM reviews submissions made by state agencies and sends its preliminary Capital Budget recommendations to the Governor. When final decisions have been made, the Governor's budget recommendations are introduced in the General Assembly as the biennial capital appropriations bill. This bill may also include capital re-appropriations, which reauthorize the appropriation of unexpended balances from previously approved projects to ensure they can continue uninterrupted toward final completion. After debate and approval by the General Assembly, the capital bill, and if separate the capital re-appropriations bill, are sent to the Governor for signature. Generally, capital bills are signed more than 90 days prior to the new fiscal biennium to ensure that the appropriations are effective at the start of that fiscal biennium.
The Ohio Controlling Board is a seven-member joint-legislative body whose purpose, specific to capital initiatives, includes reviewing and approving:
Unlike the Operating Budget, capital funds are not available for use until an agency requests that they be released by the Controlling Board or the OBM Director in accordance with ORC sections 126.14 and 127.14. Within 60 days of the effective date of the bill, OBM determines which capital appropriations are General and which are Specific in under ORC 126.14. Appropriation Line Items (ALIs) determined to be General (such as “General Renovations”) require full Controlling Board approval for the release of funds. Whereas, Specific ALIs (such as “Erie County Water Lab”) can be released by the OBM Director. All capital requests for a waiver of competitive selection or agency released competitive opportunity requires Controlling Board approval regardless of the General/Specific designation. Once funds are released, agencies may then establish purchase orders in support of the approved Controlling Board request.
Controlling Board also has authority to approve the transfer of available appropriation between two different appropriation line items under ORC 127.14 and 127.15. Agencies, through the length of the capital biennium, may experience either shifts in project priority or critical situations, or a need may occur for additional appropriation in a certain capital appropriation line item. In cases where an agency has available resources in a differently purposed capital appropriation line item, the agency may request Controlling Board approval to move those available resources to the second line item in need of the appropriation. Note, under ORC 127.15, agencies are required to notify specific members of the General Assembly representing the counties affected by transfers of appropriation. Upon approval, OBM State Accounting will move the approved amount to the identified capital appropriation line item.
On or after the effective date of the capital bill, agencies may request the Controlling Board to release the funds via a Capital Request (126.14 and 127.14.) Directions for assembling a Capital Request in the Controlling Board system are detailed in the Controlling Board Manual. Following approval by the Controlling Board (or the OBM Director for Specific Project ALIs), OBM State Accounting generates Budget Journals to allot the funds for the project in the OAKS Financials (OAKS FIN) system, or transfer appropriations as approved by the board. Creating journal entries and allotment of funds are further detailed in The FIN SOURCE for Ohio.