Public Budgeting

Opening Budget Crisis

You’re the City Manager. The Mayor walks into your office:

“We have a problem. The city council wants to hire 20 new police officers after last month’s crime spike. The community wants more social services and mental health programs. The fire department needs new equipment. The courts are backed up and need more staff. And our revenue is down 15% from last year.”

Questions:

• How do you decide what gets funded and what doesn’t?
• Who should make these choices?
• How do you balance competing demands with limited resources?

Today’s reality: Budgeting is where policy meets politics meets practicality

What Is Public Budgeting Really About?

More Than Just Numbers

A budget is:

• A plan: How we’ll use resources to achieve goals
• A policy statement: What government will and won’t do
• A political document: Who gets what, when, and how
• A control mechanism: How we manage and monitor spending
• A reflection of values: What society prioritizes

Bottom line: Budgets are the most important policy documents government produces - they determine what actually happens

Why Budgeting Matters to You

Your Future Career Impact

As a future public administrator, budgets will:

• Determine your job: Whether positions exist and get funded
• Shape your work: What programs and services you can provide
• Limit your options: Resource constraints affect everything you do
• Measure your success: Performance often judged by budget efficiency
• Reflect your values: How you allocate resources shows priorities

Criminal Justice Reality: Public safety is expensive - police, courts, and corrections consume 10-15% of most government budgets

The Fundamental Budget Questions

What Every Budget Decision Answers

1. What should government do?

• Example: More police officers or more social workers?

2. How much should government spend?

• Example: What’s the right level of public safety investment?

3. Who should pay?

• Example: Property taxes, sales taxes, or user fees?

4. Who decides?

• Example: Police chief, mayor, city council, or voters?

5. How are decisions made?

• Example: Data-driven analysis or political negotiation?

Budgets and the Economy

How Government Budgets Affect Everyone

Fiscal Policy Tools:

• Spending: Government purchases create economic activity
• Taxation: Taking money out of private economy
• Borrowing: Using future resources for current needs

Criminal Justice Economic Impact:

• Employment: Government agencies are major employers
• Local economy: Police, courts, corrections spending supports businesses
• Crime costs: Effective criminal justice saves private security costs
• Economic development: Public safety affects business investment

Understanding Budget Terminology

Key Concepts You Need to Know

Fiscal Year: 12-month budget period (often July 1 - June 30) Revenue: Money coming in (taxes, fees, grants, fines) Expenditures: Money going out (salaries, equipment, services) Surplus: Revenue exceeds expenditures Deficit: Expenditures exceed revenue Debt: Accumulated borrowing over time

Criminal Justice Examples:

• Court fines and fees as revenue source
• Federal grants for local law enforcement
• Bond issues for jail construction
• Special assessments for emergency services

The Political Nature of Budgeting

Why Budgets Are Always Political

Competing Values:

• Efficiency: Getting the most for the money
• Equity: Fair distribution of resources and services
• Effectiveness: Achieving desired outcomes
• Economy: Spending as little as possible

Political Pressures:

• Interest groups: Police unions, victim advocates, taxpayer groups
• Electoral politics: Campaign promises and voter preferences
• Media attention: High-profile incidents affecting priorities
• Crisis events: Emergencies reshaping budget priorities

The Budget Process: How It Really Works

From Planning to Spending

1. Budget Preparation (6-12 months before fiscal year):

• Agencies submit budget requests
• Executives review and modify requests
• Public hearings and stakeholder input

2. Budget Adoption (before fiscal year starts):

• Legislative review and modification
• Committee hearings and floor debates
• Final passage and executive signature

3. Budget Execution (during fiscal year):

• Agencies spend according to approved budgets
• Monthly and quarterly monitoring
• Adjustments for changing circumstances

4. Budget Evaluation (after fiscal year ends):

• Financial audits and performance reviews
• Lessons learned for next budget cycle

Public Sector Budget Calendar

When Things Happen

• January–March: Needs assessment, performance review, strategic planning
• April–June: Department budget requests, resource planning
• July–September: Executive budget preparation, community input
• October–December: Legislative review, public hearings, final approval

Ongoing Throughout Year:

• Grant applications and awards
• Emergency budget adjustments
• Quarterly performance reviews
• Monitoring and management of expenditures

Challenge: Community needs and emergencies may require flexible budget responses throughout the year.

Types of Budgets

Different Tools for Different Purposes

Operating Budget: Day-to-day expenses

• Example: Police officer salaries, patrol car fuel, office supplies

Capital Budget: Long-term investments

• Example: New police station, court building, jail construction

Cash Budget: When money comes in and goes out

• Example: Managing seasonal revenue fluctuations

Performance Budget: Linking spending to outcomes

• Example: Cost per case processed, cost per crime solved

Budgeting Approaches: Evolution Over Time

Different Ways to Build Budgets

Line-Item Budgeting (Traditional):

• Lists specific items to be purchased
• Easy to understand and monitor
• Focuses on inputs, not outcomes

Performance Budgeting:

• Links spending to measurable outcomes
• Emphasizes results and accountability
• Requires good performance measurement

Program Budgeting:

• Organizes by programs or functions
• Shows total cost of achieving objectives
• Facilitates comparison across programs

Zero-Based Budgeting:

• Starts from zero each year
• Justifies every expenditure
• Time-consuming but thorough

Line-Item Budget Example: Police Department

Traditional Approach

Personnel:

• Police Chief: $120,000
• Lieutenants (3): $270,000
• Sergeants (8): $520,000
• Patrol Officers (45): $2,475,000
• Administrative Staff (6): $240,000

Equipment:

• Patrol Vehicles (12): $360,000
• Communications Equipment: $85,000
• Weapons and Protective Gear: $45,000

Operations:

• Fuel and Vehicle Maintenance: $180,000
• Training and Professional Development: $65,000
• Office Supplies and Equipment: $25,000

Total Budget: $4,385,000

Performance Budget Example: Same Department

Outcome-Focused Approach

Public Safety Program: $4,385,000

Performance Measures:

• Response time to emergency calls: Average 6 minutes
• Crime clearance rates: 45% for violent crimes, 25% for property crimes
• Community satisfaction: 75% approval rating
• Officer training hours: 40 hours per officer annually

Cost per Unit:

• Cost per emergency call response: $125
• Cost per crime cleared: $2,850
• Cost per patrol hour: $85
• Cost per citizen served: $87

Advantages: Shows what taxpayers get for their money

Budget Constraints and Trade-offs

The Reality of Scarcity

Common Trade-offs in Criminal Justice:

Personnel vs. Equipment:

• Hire more officers or buy better technology?
• Training vs. overtime coverage?

Prevention vs. Enforcement:

• Community programs or more arrests?
• Mental health services or jail beds?

Quality vs. Quantity:

• Better training or more personnel?
• Newer equipment or more positions?

Short-term vs. Long-term:

• Immediate response or prevention programs?
• Emergency repairs or planned replacement?

Budget Challenges for Public Agencies

Key Issues Facing Government Budgets

Rising Costs:

• Personnel: Salary increases, pension obligations, healthcare costs
• Technology: Upgrading and maintaining IT systems and equipment
• Regulatory compliance: Meeting new laws, mandates, and standards
• Training: Ongoing staff development and certification requirements

Revenue Pressures:

• Economic downturns: Reduced tax and fee revenues
• Competing priorities: Demands from multiple sectors (education, health, safety, infrastructure)
• Legal limits: Tax caps, balanced budget requirements, and spending restrictions
• Political pressure: Anti-tax sentiment and calls for reduced government spending

Demographic and Social Changes:

• Aging population: Increased demand for health and social services, changing tax base
• Urbanization: Higher service demands in cities, infrastructure strain
• Economic inequality: Greater need for public assistance with limited resources
• Population growth or decline: Shifting service needs and funding challenges

Budget Ethics and Accountability

Responsibilities of Budget Professionals

Ethical Principles:

• Honesty: Accurate information and realistic projections
• Transparency: Open processes and clear communication
• Stewardship: Responsible use of public resources
• Fairness: Equitable treatment and access

Accountability Mechanisms:

• External audits: Independent review of spending
• Performance measurement: Tracking results and outcomes
• Public reporting: Regular communication with stakeholders
• Legal compliance: Following laws and regulations

Your Role as Budget Professionals

Skills You’ll Need

Technical Skills:

• Financial analysis and forecasting
• Performance measurement and evaluation
• Technology systems and data analysis
• Legal compliance and audit preparation

Political Skills:

• Stakeholder engagement and communication
• Negotiation and conflict resolution
• Coalition building and consensus development
• Media relations and public communication

Management Skills:

• Strategic planning and priority setting
• Resource allocation and optimization
• Risk management and contingency planning
• Change management and adaptation

Module 7-2 Summary

Key Takeaways:

• Budgets are political documents that reflect values and priorities
• Criminal justice consumes significant government resources
• Multiple budget approaches serve different purposes
• Grant funding creates opportunities and constraints
• Performance measurement is increasingly important
• Technology is transforming budget processes
• Future success requires technical, political, and management skills
• Budget ethics and accountability are essential
• Crisis situations require flexible budget responses

Next: Examining regulation, implementation, and performance measurement in public administration