Understanding State Budgets: Definition, Cycle, and Approval
State General Budgets
The budget can be defined as the legislative act that authorizes the maximum amount of expenditure undertaken during the financial period and anticipates the revenue needed to finance them. Annual expressions are adopted by law in the courts, computed in which obligations are determined as the maximum the State can recognize, as well as the entire income toward each other concepts. The corresponding period is expected to obtain the preparation of the quotation for the government, through the Ministry of Economy and Finance, as well as the Ministry of Labor and Social Affairs, to develop a draft budget to be presented at the Council of Ministers. If approved, it happens to be a draft law, which courts will take generally, and if approved by an absolute majority, the law will convert into the PGE (Presupuestos Generales del Estado).
State Revenue
As seen earlier in the revenue of the State, we have divided this into three concepts:
- Taxes: Monetary amounts that citizens are legally mandated to pay to the State.
- Fees: A monetary amount citizens must wager to the State when the State pays for a service that has been applied by the citizen himself.
- Income/Wealth: Rents that the State administration receives from the public and their heritage.
Budget Cycle
The concrete steps are:
- Elaboration: It corresponds to the final executive council of ministers to approve the draft budget law. The Ministry of Economy prepares the draft budget. The draft budget of the Social Security has been prepared by the Ministry of Labor and Social Affairs.
- Approval: The bill is presented to the government by the courts. No cuts are voted on, being able to raise the rest of the political forces that budget amendment or even go back to the government. To approve the budgets, there should be an absolute majority in Congress. If this majority is not achieved, it will be returned to the government, which should produce another to be re-voted on.
- Budget Execution: Once approved by the legislature, it again corresponds to the execution or implementation of the approved budget by the government.
- Control: The execution of the corresponding quotation and the government, but there are a few organs in the State in charge of controlling that the budget the government has carried out is correct. Such control is divided into two fields, which are the external organ of the State, the Court of Accounts, and the internal, the General Intervention of the State Administration. The Court of Accounts is an organ that depends on the legislative power. After executing the budget, the government prepares a report on the execution, which will be presented to Parliament. The General Intervention of the State Administration is an organ that controls the budget execution, determining if the execution of it takes place under the general law established in the budget.
The State’s general budgets must be presented by the government by October 1st each year and have a deadline to be approved by December 31st of that year. In case of failure to approve the budget submitted by the government, that is, not obtaining an absolute majority in Congress, the budget that would be in force for the following year would be the same as the previous year, resulting in damage to the country.
