What Does it Mean to Ratify a Budget?

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Voters have approved a ratified budget.
Voters have approved a ratified budget. (Image: Comstock/Comstock/Getty Images)

Disagreements are often born out of financial matters as people have opposing views regarding the best times and places to spend money. In instances where only one or a few people have money invested in a situation or business venture, an individual has the right to have the final say over budgeting decisions to avoid such disagreements. In other instances, where many people have money invested into an endeavor, a budget may have to be ratified before it may go into effect.

Budget Ratification

Budget proposals that require the use of funds collected from a large group of people generally must be ratified. When a budget is ratified, the people from whom the funds were collected vote on and approve the budget. In some cases, the voters are pre-elected individuals, such as local or state government officials, who represent larger groups of people. Budget ratification commonly occurs in associations, school boards and in government.

Associations

Many associations, such as neighborhood and community associations, are funded by members' fees and budgeting decisions directly impact community members. For this reason, community association budget changes often must be ratified. In 2006, the Connecticut Chapter of the Community Associations Institute published its ratification budget policies on its website. The Connecticut Chapter requires a majority vote from the condominium residents who attend the ratification proceedings. If the majority of the residents vote against the budget, the budget is rejected.

School Boards

Educational funding causes controversy as it involves two things that matter to nearly everyone -- children and tax dollars. When a school district proposes budget cuts or increases, the budget must first be ratified. For example, in a 2011 "Bangor Daily News" article titled "RSU 3 Voters Ratify Budget," Abigail Curtis discusses the approval of a $19.2 million budget for a school district in Unity, Maine. The budget was a decrease from the previous year and its approval allowed the school district to avoid layoffs and develop some innovative programs, but the board could not implement the budget without approval from voters.

Government

The local, state and federal governments assign certain individuals to handle financial matters. But because any and all financial matters impact the citizens and are funded by tax dollars, large budget proposals must be ratified. Citizens do not vote on budgets, but the government officials they elect do vote on their behalf.

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