1 chapter 7 budget preparation: the decision process decisions on budget requests budget documents
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Chapter 7Budget Preparation:The Decision Process
•Decisions on Budget Requests•Budget Documents
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Decisions on Budget Requests
Concerns of the Chief Executive
• Strategic Concerns
Sense of prioritiesEconomic impact of the budgetSocial justice and immigrationGenerational effectsOther concerns?
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Decisions on Budget Requests
Concerns of the Chief Executive (continued)
• Use of cost-effectiveness analyses
• Projections for budget surpluses and deficits
• Tactical ConcernsReactions from public and legislature, intergovernmental reactions
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Decisions on Budget Requests
Revenue Deliberations
• Revenue estimates for each revenue source• Limitations on taxes• Balanced budget requirements and revenue
estimates• Eliminating some tax expenditures as an
alternative to raising taxes• Tax earmarking—Balkanizing decision making
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Decisions on Budget Requests
Spending Deliberations
• Entitlements and other commitments
• Competition among organizations for role in budget decision making
Office of Management and Budget, Councilof Economic Advisers, Director of NationalIntelligence, etc.
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Decisions on Budget Requests
Spending Deliberations (continued)
• Budget office roles
• Agency expectations and deliberations
Competition for funding, across-the-boardcuts
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Decisions on Budget Requests
Spending Deliberations (continued)
• Budget office and agency relationsHow is the budget office organized towork with agencies?
• Budget office recommendations to the chief executive
Serves the executive’s prioritiesProvides neutral competence
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Decisions on Budget Requests
Downsizing, Rightsizing, and Spending Cutbacks
• Fiscal stress forces cuts in spending in the short-term and long-term
• Cutback management
• Budget office often increases its role during periods of cutbacks
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Decisions on Budget Requests
Downsizing (continued)
• Legislatures may both push for cutbacks and try to block them
• What areas are common targets for budget cutting?
• How does budget cutting relate to systems of budgeting (see Chapter 6)?
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Decisions on Budget Requests
Final Preparation Deliberations
• Chief executive deeply involved
• Who looks at the budget as a whole during this part of budget preparation?
• Give examples of tradeoffs that must be made in putting a budget together
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Budget Documents
Number and Types of Documents
• Document characteristicsPhysical size, use of charts and otherillustrations, amount of space devoted torevenues and expenditures, space devoted
to each department andorganization
• Budget-in-Brief
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Budget DocumentsNumber and Types of Documents (continued)
• Federal Budget Documents
Budget of the United State GovernmentBudget AppendixAnalytical PerspectivesHistorical Tables
Other relevant OMB documents—PART, etc.
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Budget Documents
Number and Types of Documents (continued)
• Other Federal Documents
Economic Report of the President
Combined Statement of Receipts, Outlays,and Balances of the United States Government
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Budget Documents
Number and Types of Documents (continued)
• Tax expenditures. See Figure 7-1
• Budget messages. See Figure 7-2
• Publication of proposed and approved budgets
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Budget Documents
Coverage
• State and local governments use special funds as well as general funds
• Federal budget coverageUnified budget and the off-budget
• Alternative budget presentations
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Budget DocumentsCoverage (continued)• The special case of credit and insurance
liabilities. See Figure 7-3 and Table 7-1.
Direct loans, guaranteed loans, insuranceprograms, government sponsoredenterprises
Federal liability reforms—Federal CreditReform Act and Debt CollectionImprovement Act
State and local government liabilityreforms
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Budget Documents
Information Displays
• Revenues. See Table 7-2• Expenditures
Personnel. See Tables 7-3 and 7-4Current Services. See Table 7-5Program Information. See Table 7-6Use of Program Structure Program Measures. See Table 7-7 and Figure 7-4Program Revisions. See Figure 7-5
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Budget Documents
Information Displays (continued)
• Future years
• Space limitations
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Summary
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