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HB 645

Require the use of zero-based budgeting every ten years

136th Legislature (2025-2026) Introduced by Mike Dovilla

HB 645 would finance the state budget every ten years using zero-based budgeting, starting 2027, requiring agencies to justify all expenditures from zero.

Introduced
#financeandappropriations
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WeVote Research Nonpartisan
Bill Summary · HB 645

Overview

HB 645 (137th General Assembly, introduced in 2025-2026) would require zero-based budgeting (ZBB) to be used in the development of the state budget every ten years, starting with the budget submitted for the 2027-2028 biennium. The bill amends several Revised Code sections to formalize ZBB as the budgeting standard for the Office of Budget and Management (OBM) and state agencies on a decennial basis and to adjust related budgeting processes accordingly.

Purpose and Intent

  • Establish zero-based budgeting as the governing method for preparing the state budget at regular ten-year intervals.
  • Ensure that the Governor’s budget and agency requests are developed from zero rather than based on prior-year appropriations, promoting justification for every expenditure.

Key Provisions and Changes

  • Definition and Scope
    • Zero-based budgeting is defined as starting budgets from zero and justifying all requested appropriations based on purposes, without reference to prior year appropriations.
  • Timetable and Application
    • Beginning with the general assembly convening in 2027 (the 137th General Assembly) and every ten years thereafter, the budgeting process must be based on ZBB principles.
    • The Governor’s budget submission to the General Assembly must be prepared using ZBB principles.
  • Roles and Responsibilities
    • The Director of Budget and Management (OBM) must prepare and distribute budget request forms that require agencies to prepare estimates using ZBB.
    • Agencies must prepare their revenue and expenditure estimates for the operating budgets using ZBB principles.
    • OBM shall incorporate ZBB into the budgeting forms and process used by agencies.
  • Affected Budgets (operating budgets)
    • ZBB applies to main operating budgets, the transportation budget, and related state agency budgets that comprise the operating budget cycle.
  • Revisions to Existing Process
    • Sections 107.03, 126.02, 126.13, and 126.27 are amended or reorganized to implement ZBB requirements and to adjust submission timelines and reporting accordingly.
    • Section 126.025 is enacted to formally define ZBB and to assign duties to OBM and agencies for implementing ZBB in budget requests.
  • Transitional and Administrative Provisions
    • OBM is tasked with determining methods to incorporate ZBB principles into the standard budget request forms and guidance.
    • Agencies must submit their zero-based budget estimates for each biennium within the stated timelines.

Who/What is Affected

  • State agencies that receive direct appropriations (operating budgets, including main operating budgets, transportation budgets, and related agencies).
  • Office of Budget and Management (OBM), as the central administrator responsible for directing and implementing ZBB in forms, guidance, and budget submissions.
  • The Governor, whose biennial budget submission to the General Assembly would be prepared under ZBB.
  • The General Assembly, which reviews and appropriates the Governor’s budget and agency requests prepared under ZBB.

Procedural and Timeline Aspects

  • Effective decennial implementation:
    • First decennial ZBB cycle begins with the budget submitted for the 2027-2028 biennium.
    • Subsequent ZBB cycles occur every ten years thereafter.
  • Submission deadlines:
    • The bill preserves or reorganizes existing submission timelines for budget requests, but these are now aligned with ZBB principles. OBM will provide forms and guidance requiring ZBB-based estimates.
  • Enactment and structure:
    • The bill repeals existing sections governing traditional incremental budgeting and replaces them with ZBB-focused provisions (with accompanying new definitions and required processes).
  • Local impact:
    • The fiscal note indicates no direct effect on local governments; the impact is primarily on state budgeting administration and workload.

Potential Impacts

  • Administrative Burden: ZBB is typically more resource-intensive, potentially increasing workload for OBM and state agencies during the decennial budgeting cycle.
  • Budget Scrutiny: A zero-based approach can lead to more rigorous justification for programs and expenditures, possibly affecting funding levels for various programs.
  • Long-Term Budget Discipline: By starting from zero, the state may reallocate resources toward high-priority or result-driven programs, potentially altering the composition of funded activities over time.

If you’d like, I can provide a concise bullet-point summary or a comparison table showing how the current system differs from the ZBB approach introduced by HB 645.

Compiled from official sources — confirm details with the bill’s official record.

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