Lapses in the State Budget and How it impacts state employees


  1. What is a lapse? Lapses are uncommitted funds that remain unspent at the close of a fiscal year and are returned to the fund from which they were originally appropriated or allocated. Lapsed money can also be reallocated to other parts of the budget.
  2. Does every budget have lapses built in?
    1. With a biennium budget around $50 billion, some amount of lapses is expected to be built into each budget. For example, when an employee retires, it might take a few months to replace that employee, those few months of salary ‘savings’ contribute to the overall lapse in savings.   Lapses are also created by delays in starting new programs, and/or higher than predicted federal reimbursements of state programs.
  1. Why is this year’s lapses line item so big?
    1. One way to get around the spending cap is to build savings targets into the budget plan through assumptions. The new budget recently passed assumes the governor will lower General Fund spending by $134 million next fiscal year and by $183 million in 2024-25 by finding savings along the way for a total of $317 million over the biennium.

This figure represents a significant increase in lapses than what we normally see in a budget, especially during years of surplus, and is a consequence of our Governor’s rigid adherence to the spending cap.

  1. What do lapses mean for state employees?
    1. Typically when significant lapses are included in the budget it is in during years of budget crises  – assuming large lapses avoids the General Assembly taking responsibility for cuts and programs in services and leaves it to the governor to implement the savings through job freezes, agency allotment reductions,  or sometimes even layoffs.   However no budget crisis is expected in the upcoming biennium.

So in this sense, the assumed lapses in the current budget may turn out to be essentially an accounting gimmick having no impact at all.    However, they do give the Secretary of OPM additional power to slow or fail to fill positions, and so could end up exacerbating our ongoing fight to protect and expand public services for residents, and job opportunities for state employees.

  1. What is SEBAC doing? 
    1. The assumed lapses are but one part of the problem with the budget. The organized efforts of our members along with allies in the broader labor movement and Recovery for All pushed the budget in as positive direction as we could – significantly better than the governor’s original starting point.  But the governor’s dogmatic interpretation of the spending cap has resulted in a budget that fails to seize real opportunities for progress, especially for working families, black, brown and white, and even moves backwards in crucial areas such as funding for public higher education.  It also presents challenges to getting fair contracts as we move into wage reopeners and new full agreements.  We will need our members to continue to fight against the damage this budget does, and for greater equity and fairness for our members and all working families.