The Department of Planning and Budget was created in 1976, but Virginia's budgeting history goes back to the beginning of state government. For nearly 150 years following independence in 1776, the General Assembly prepared, introduced, and enacted an appropriation bill to allocate public resources.
The concept of an executive budget arose across the nation in the early years of the 20th Century, and in 1916 a legislative study commission in Virginia recommended that the state adopt an executive budget system. Governor Westmoreland Davis supported the idea, and in 1918 the General Assembly enacted legislation to implement it.
The Governor's staff prepared the first executive state budget for the 1920-22 biennium. In 1922, a Division of the Budget was established in the Governor's office, headed by a director. Planning in the Commonwealth was initiated in the next decade and continued to mature, culminating in the establishment of the Virginia State Planning Board by the General Assembly in 1938.
Over the years, many functions were assigned to the Division of the Budget which were later spun off to separate agencies. For example, the agency was at one time responsible for the management of state records (now assigned to the Library of Virginia), state personnel functions (now the Department of Human Resource Management), and engineering and architectural activities for state property (now the Department of General Services). Until the 1970s, the Division of the Budget served as staff to the legislative money committees during the General Assembly session.
Until 1966, the staff of the Division of the Budget was small -- consisting of only the director, an assistant director, an office manager, and a few clerical staff. For many years, staff from the Division of Personnel were assigned every two years to assist budget staff in preparing the biennial budget. Later, consultants were hired every two years to review agency budget requests. During Governor Mills Godwin's first administration, the decision was made to create a permanent professional staff, and the first person was employed in 1965. In 1966, a deputy director of the budget was hired to direct the development of the permanent professional staff, which grew to five or six people over the next several years.
The Division of the Budget was located originally on the third floor of the State Capitol, opposite the Governor's Office. When the attic space in the Capitol was remodeled in 1962, the agency relocated there.
The director of the Division of the Budget reported directly to the Governor until 1966, when the Office of Commissioner of Administration was established. At that time, the budget agency began to report to the Governor through the Commissioner of Administration.
The advent of the secretarial system in 1972 under Governor Linwood Holton brought further changes, including a move from the Capitol to the Ninth Street Office Building in 1974. In 1975, as an outgrowth of studies by the Hopkins Commission on reorganizing state government, the General Assembly enacted legislation that established DPB. The new agency was created on July 1, 1976, reporting to the Governor through the Secretary of Administration and Finance. It combined the former Division of the Budget with the former Division of State Planning and Community Affairs, bringing the budgeting and planning functions of state government together. Since it was created, the duties and responsibilities of the agency have expanded and changed many times. In 1982, DPB absorbed the functions of the Department of Intergovernmental Affairs, which was discontinued.
The reporting relationship of the DPB director has changed many times since the agency's inception. From 1976 to 1978, the director reported to the Governor through the Secretary of Administration and Finance. From 1978 to 1982, the positions of DPB director and assistant secretary for financial policy were held by the same person, who reported directly to the Governor. From 1982 to 1984, the director/assistant secretary for financial policy reported to the Governor's Chief of Staff. Since July 1984, when the Office of Secretary of Finance was created with a separate Deputy of Finance position, DPB has had a full-time director who reports to the Governor through the Secretary of Finance.
DPB's organizational structure has also changed several times since it was created. These changes reflect the functions and responsibilities of the agency, as well as the change in directors. Since 1976, DPB has had six directors and one acting director. The number of deputy directors has ranged from one to two. The reporting levels from the staff to the director have been as few as one to as many as five. The number of organizational subunits has ranged from seven to seventeen.