Ley 47/2003, de 26 de noviembre, General Presupuestaria - 2a parte - Art 26 a 38

Understanding the General Budgetary Law: Key Principles and Rules

Introduction to Budgetary Programming

• The discussion begins with an overview of the General Budgetary Law (Law 47/2003), focusing on Title II, specifically Article 26, which outlines the principles and rules governing budget programming.

• Key principles of budget programming include stability, financial austerity, multiannuality, transparency, efficiency in resource allocation, and high institutional responsibility as per Organic Law 2/2012.

Importance of Memorizing Principles

• It is emphasized that memorizing these principles is crucial for exams; variations in wording may be used to test knowledge.

Management Budget Principles

• Article 27 discusses management budget principles. The annual budget must be approved by the General Courts within a multiannual framework.

• Entities with a limiting budget can only spend it on specific purposes, highlighting the binding nature of budgets.

Clarity in Budget Information

• Budgets and their modifications must provide clear information to verify accurate recording of both expenses and revenues.

Exploring Multiannual Budgets

Articles on Multiannual Scenarios

• Chapter 2 covers Articles 28 to 31 regarding multiannual budgeting. Article 28 focuses on multiannual scenarios while Article 29 addresses programmatic spending.

• The distinction between organic parts (who spends), programmatic parts (what is spent on), and economic parts of the budget is introduced.

Role of the Minister of Finance

• The Minister of Finance is responsible for preparing multiannual scenarios. This includes an estimated revenue budget and a realistic expenditure budget aligned with fiscal stability.

Defining Stability in Budgets

Understanding Fiscal Stability

• Fiscal stability refers to maintaining structural balance or surplus within each ministry's expenditures as outlined in Organic Law 2/2012.

Special Considerations for Social Security

• Unique provisions exist for social security budgets due to their significant economic volume related to pensions.

Evaluating State Budgets

Definition and Structure of State Budgets

• Article 32 defines state budgets as a systematic expression of rights and obligations liquidated during the fiscal year across public sector entities.

Temporal Scope of Budgets

• The fiscal year aligns with the calendar year from January 1st to December 31st, covering all recognized obligations until year-end.

Budget Classification: Economic Coding

Components of Expenditure and Revenue

• Expenditures are categorized into three sections: organic part, programmatic part, and economic part; revenues are divided into organic part and economic part.

Key Concepts: Spending Programs vs. Budget Credits

Budget Preparation Process

Overview of Budget Definitions

• The annual budget credit set is crucial for understanding the context of budget preparation. It is essential to grasp two clear definitions related to this process.

Steps in Budget Preparation

• The Minister of Finance establishes the budget preparation procedure, issuing instructions to other ministers for their expenditure forecasts. This reflects the administrative control over public finances.

• Once ministers prepare their multi-year budgets, they submit them to the Minister of Finance, who consolidates these into a state budget bill. This highlights the central role of the Minister of Finance in coordinating budgetary efforts.

Legislative Process and Approval

• Article 33 emphasizes that the income budget must be prepared by the Minister of Finance, underscoring their pivotal role in financial planning and management. Additionally, there was an instance where two questions received identical answers from the minister regarding budget creation, which is unusual in examinations.

• After preparing the budget, it is submitted to the government for review; if approved, it moves on to Article 37 requirements for submission to Congress before October 1st of the preceding year with necessary documentation attached. This step ensures transparency and legislative oversight in budgeting processes.

Challenges in Budget Approval

• The general state budget requires simple majority approval as an ordinary law; if not approved by December 31st, previous budgets are automatically extended without changes unless specific adjustments are made administratively or through agreements among parties involved. This indicates potential challenges and negotiations inherent in fiscal policy-making.

• If a new budget isn't passed by year-end, prior budgets remain effective but may require adaptations based on current administrative structures or changes within ministries—highlighting flexibility within rigid fiscal frameworks.

Conclusion and Next Steps