Lesson 4 Budget Processes and Institutions Justin Marlowe

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Lesson 4: Budget Processes and Institutions Justin Marlowe PBAF 522 – Public Financial Management

Lesson 4: Budget Processes and Institutions Justin Marlowe PBAF 522 – Public Financial Management and Budgeting Autumn 2015

Key Takeaways > Budget balance means different things in many different (political) contexts >

Key Takeaways > Budget balance means different things in many different (political) contexts > The three "A"s of budgeting: authority, allocation, and allotment > Real-life government budget processes are quite different from the legal or statutorily-defined processes > Ballot initiatives are a core part of West Coast public finance, even though they fall outside the formal budget process

November Ballot Initiatives > Initiative 1366 (statewide) – decrease the sales tax rate from

November Ballot Initiatives > Initiative 1366 (statewide) – decrease the sales tax rate from 6. 5% to 5. 5% unless the legislature refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes, and legislative approval for fee increases. ” > Initiate 1401 (statewide) – outlaws trading in endangered species > Four statewide “advisory votes” on marijuana excise taxes, motor fuels taxes, others > King County charter amendment on law enforcement oversight > King County Prop. 1 – Children and families levy; $400 million 1. 4 “mils” for investments in pre-natal support, child development, etc.

November Ballot Initiatives > Initiative 122 (City of Seattle) – Publicly funded elections; $300

November Ballot Initiatives > Initiative 122 (City of Seattle) – Publicly funded elections; $300 million; less than one-tenth of one mill > Proposition 1 (City of Seattle) – “Move Seattle” transportation levy; renews and increases our existing transportation levy; Six mills for $930 million over 9 years > Depending on where you live, dozens of other levies for general levy lid lifts, fire protection districts, water districts, marijuana legalization, etc.

Strategies for the “Budget Game” > Strategies that always apply: 1. 2. 3. 4.

Strategies for the “Budget Game” > Strategies that always apply: 1. 2. 3. 4. 5. Cultivate a clientele Propose a study Make friends with legislators "Round it up“ "We have a crisis" > Strategies to fight cutbacks: 1. 2. 3. 4. 5. "Cut the main artery“ "Just take the whole thing“ "It's essential for public safety“ “It’s for the children” “You Pick”

Strategies for the “Budget Game” > Strategies to expand a budget: 1. 2. 3.

Strategies for the “Budget Game” > Strategies to expand a budget: 1. 2. 3. 4. 5. "It pays for itself“ Spend to save“ "Foot in the Door“ "It's just temporary“ "Finish what we started"

Strategies for the “Budget Game” > How to “balance” the budget 1. 2. 3.

Strategies for the “Budget Game” > How to “balance” the budget 1. 2. 3. 4. 5. 6. 7. Rosy revenue estimates One-shots Inter-budget manipulation Bubbles and timing (accelerated collections, usually) Ducking the decision (supplemental appropriation next year) Intergovernmental games - shift to another level Magic asterisk – savings “to be identified”