Budget Staff Meeting

1
Budget Staff Meeting

• Steps 1 2
• January 23, 2006

2
Tonights Agenda

• Mayors memorandum
• Review impact of budgets on people and
  organizations
• Terms and concepts of budgeting
• Major revenue sources, methods
• City Characteristics (social, political,
  economic)
• Analyze city revenues
• Discuss city departments

3
Mayors Memorandum

• First year process
• Limited time to complete budget
• Requests reflect relationship between doing and
  spending
• Budget size appropriate for Yooab
• Budget must be balanced

4
Impacts of Budgeting

• Government vs. Private Sector
• Economic Influences
• Social and Demographic Change
• Legal and Intergovernmental Context
• Political Framework

5
Sources of Conflict

• Advocates vs. Guardians
• Accuracy vs. Political Expediency
• Bureaucracy vs. Democracy
• Special vs. Collective Interests
• Public Will vs. Public Welfare

6
Budget Types Reform

• Line-Item Budgeting
• Performance Budgeting
• Program Budgeting
• PPBS
• Zero-Base Budgeting
• Target-Based Budgeting

7
Comments, QuestionsBreak!!
8
Getting Acquainted with the City

• Political and Policy Framework
• Economic Base
• Mandates
• Revenues

9
Political and Policy Framework

• Provision vs. Production (Oakerson p. 49)
• Policy Arenas (Peterson p. 63)
• Service Provision

10
Economic Base

• Galambos and Schrieber p. 79
• Local economy is divided into 2 parts
• Export activity
• All other local economic activity

11
Mandates

• ACIR, p. 110
• Number and cost of them have grown substantially
• Arise from statutes, consitutional provisions,
  court decisions, administrative orders demanding
  action from subordinate governments
• Due to policy reform, professionalism, st/loc
  innovations, performance deficiencies
• Issue Bottom line, costs
• Who should pay, the greater good?, equity moral
  objectivity

12
Revenues

• Evaluating Tax Revenue Systems (DC Tax Comm p.
  154)
• Productivity elastic vs. inelastic
• Elastic Taxes whose revenues are automatically
  responsive to changes, expands/contracts with
  economy (ex income, sales)
• Inelastic Provides revenues which are stable
  regardless of rise/fall in economic activity
  (liquor, tobacco)

13
Revenues Contd

• Equity horizontal vs. vertical
• Horizontal (equal treatment of equals)
• Vertical
• Progressive- tax burden varies directly with
  income (favor poor)
• Regressive- tax burden and incomes inversely
  related (consumption, such as retail sales,
  liquor, tobacco, and gasoline taxes) (favor
  wealthy)
• Proportional- no change in tax burden as income
  changes

14
Pricing/Providing Services

• Neels Caggiano p. 173
• Three types of services/user charges
• Public Goods
• Private Goods
• Merit Goods
• Question how to make costs fair, determine
  general benefits which should be charged to
  consumers

15
City Characteristics

• Form of Government (12)
• Socioeconomic Characteristics (13)
• Role of Local Govt (14)
• Tax Base, Sources of Revenue (16, 7)
• Potential Revenue Sources (17)
• Changes in Revenue Sources (18)

16
Next Weeks Meeting

• Excel Training Thursday 530
• Developing Expenditure Histories
• See reading schedule /or workbook for details