Budget reform requirements intend to make government more understandable to the public, improve productivity and customer service, and strengthen accountability for results. Implementation of these requirements, first enacted in 1993, is now well underway. The process is evolutionary and challenges both agency managers and policy makers. These reform efforts help create better alignment of the State's planning, quality, budgeting, management, and accounting systems.

Laws 1993, Chapter 252 (H.B. 2332) established budget reforms. Budget reforms included: bifurcated budgeting with definition of the major budget units, established administrative costs, required three-year strategic plans from the budget units, amended appropriations reporting, and established the Program Area Review (PAR) process with a specific listing of programs for PAR review.

Laws 1995, Chapter 283 (H.B. 2444) amended the PAR process by updating the list of PAR programs, added the requirement for three-year strategic plans for each program and subprogram in the list of programs, and included performance measures in both the budget unit (agency) and program plans. Arizona School for the Deaf and Blind was added to the listing of major budget units.

Laws 1996, Chapter 342 & 13 (H.B. 2440) established the Government Information Technology Agency (GITA) and requires budget units to develop, implement and maintain a coordinated statewide plan for information technology. GITA coordinates these plans.

Laws 1997, Chapter 210, (H.B. 2082) converted all budget units into a biennial cycle anticipating that the major emphasis of the first regular session of each Legislature would be budgetary review and approval, while program evaluations and PARs would be conducted during the second regular session. These laws also further amended the PAR process by specifying the Joint Legislative Budget Committee (JLBC) shall select programs for SPAR review and that budget units may be required to develop joint assessments. These laws further established program budgeting with the deadline of fiscal year 2006 for completion of a phased in approach for all budget units.

Laws 1999, Chapter 148, (S.B. 1365) replaced the PAR process with a Strategic Planning Area Review (SPAR) process that culminates in the decision to retain, eliminate, or modify a program area based on findings contained in an agency-authored self assessment and information from the plans.

Most recently, Laws 2002, Chapter 210, (S.B. 1436) has further changed the planning process slightly by distinguishing between long-range planning (strategic) and short-range planning (operational) tied to budget cycles and performance measures. Some of the highlights of this law are:

• Identifies seventeen agencies as an "annual budget unit" which would require that the identified agencies annually submit a budget. The identified agencies are specifically listed in the statute and are among the largest general fund agencies. Agencies not defined as an "annual budget unit" would continue to submit budgets biennially.
• Provides the Governor discretion to require biennial budget units to submit budget estimates more often than every two years.
• Streamlines the appropriation limit reporting requirements by requiring that the OSPB and JLBC Staff determine and report to the Governor and Legislature an estimate of appropriations by February 15 of each year and include information from the preceding fiscal year, the current fiscal year, and for the ensuing fiscal year.
• Requires that "annual budget units" develop a five-year strategic plan for the entire budget unit and be updated annually as necessary. Requires that the plan include strategic issues, a mission statement, description, goals, strategies and resource assumptions. Requires that the resource assumptions include the number of full-time equivalent positions and budgetary data, including all funding sources categorized by general fund, other appropriated funds, non-appropriated funds, and federal funds. Requires that the five-year plans be posted on the agency's website and submitted to OSPB and JLBC Staff by January 1 of each year and requires that the House and Senate appropriations committee shall annually review the strategic plans.
• Modifies the Master List of State Government Program publication requirements for the budget unit (also known as agency level plan - note that program and subprogram planning requirements are unchanged). Agencies will be required to submit a mission statement, description, and strategic issues (previously they were not statutorily required to submit strategic issues and they were required to submit goals and measures which will no longer be required at the agency level).
• Requires that OSPB publish a federal funds report annually, which converts a biennial process to an annual process.
• Converts the capital outlay appropriations process from a biennial to an annual process.
• Provides that the application of the new provisions is effective for fiscal year 2004.

OSPB publishes the Master List of State Government Programs and Five-year Strategic Plans of State Agencies annually.