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Owners will definitely increase your budget. I've had this happen many times. You'll get an email, saying something like, after reviewing the teams finances, I'm increasing the budget from X to X.
I've had owners reduce my budget, but that is rare for me, as I keep my payroll on the lower side. You may have already seen this in the manual, but here's sort of an explanation.
Setting the Team Budget
By default, the team owner defines your annual team budget. As the GM, you have some influence over team finances - signing players and personnel, setting the scouting budget, setting ticket prices, etc. Generally, you cannot go over the budget that the owner has allotted. However, depending on the owner's personality, he or she may let you exceed your budget in certain circumstances. The team budget can be seen on the Finances page. The team budget is set each year on the day after the playoffs end. Owners set team budgets according to a combination of factors, including the team's financial state and the owner's personality.
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