Objectives. We examined critical budget and priority criteria for state health agencies to identify likely decision-making factors, pressures, and opportunities in times of austerity. Methods. We have presented findings from a 2-stage, mixed-methods study with state public health leaders regarding public health budget- and prioritysetting processes. In stage 1, we conducted hour-long interviews in 2011 with 45 health agency executive and division or bureau leaders from 6 states. Stage 2 was an online survey of 207 executive and division or bureau leaders from all state health agencies (66% response rate). Results. Respondents identified 5 key criteria: whether a program was viewed as "mission critical," the seriousness of the consequences of not funding the program, financing considerations, external directives and mandates, and the magnitude of the problem the program addressed. Conclusions. We have presented empirical findings on criteria used in state health agency budgetary decision-making. These criteria suggested a focus and interest on core public health and the largest public health problems with the most serious ramifications.