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The State budget process is essentially governed by two provisions of the State Constitution. In part, Art. III, Sec. 32 provides that money in the State Treasury cannot be withdrawn unless appropriated by law. Art. III, Sec. 52, known as the "Budget Amendment," provides that such an appropriation must be either a Budget Bill or a Supplementary Appropriation Bill. It is the Governor's responsibility to prepare the annual Budget Bill as well as the accompanying Budget for submission to the General Assembly soon after it convenes in its regular session. The Budget is a complete plan of estimated revenue and proposed expenditures for the fiscal year that begins the following July 1st.

Except as expressly mandated by the Constitution or statutes, the Governor has complete discretion over the inclusion of appropriations in the Budget and the amount for the executive branch. The constitutional mandates relate to funding the public schools, redemption of the State debt, and payment of certain salaries. With the consent of the General Assembly, the Governor can amend or supplement the Budget Bill prior to its passage. Subject to certain exceptions and limitations, the General Assembly has express power only to strike or reduce appropriations in the Budget Bill. However, this express power includes the implied power to condition or qualify. Once the Budget Bill is passed by the respective Houses in the same form, it becomes law without being presented to the Governor. As introduced and as passed, the Budget must be balanced; that is, appropriations cannot exceed revenue as estimated by the Governor.

Following passage of the Budget Bill, the General Assembly may pass appropriation bills that supplement the Governor's Budget Bill. However, a Supplementary Appropriation Bill must be limited to a single work and must levy a tax for its support. The most common Supplementary Appropriation Bill is the annual Capital Budget, which authorizes the issuance of State bonds, levies a tax for their redemption, and appropriates the proceeds for various capital projects. A Supplmentary Appropriation Bill is subject to the Governor's veto, including the item veto.

See Richard E. Israel, "A History of the Adoption of the Maryland Executive Budget Amendment" for a history and analysis of the adoption of the Executive Budget Amendment.