Introduction
The budget process is the most important aspect of fiscal decision making in Public Administration. Smith and Lynch (2004), argues that “Public budgeting is an activity that many people view from their own perspectives and, thus, they do not comprehend the full complexity of budgeting” (p. 34). Similar to the contextual definition of complexity in budgeting process, a classic example was the State of California’s budget impasse for the year 2010-2011. This essay examines and analyses the concerns that lead to passing a late budget in the State of California. It further goes into details regarding the reasons, resolutions, and consequences faced due to the budget Impasse.
As published in the Press Democrat by Judy Lin (2010), “Even
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As mentioned by Thompson (2010), in the Associated Press, “Lawmakers bridged a $19 billion shortfall, more than 20 percent of the $87.5 billion general fund spending plan”. This shows that the state was heading towards a financial crisis and more deficit creation. Moreover, Thompson (2010), in the Associated Press also points out that “It includes no tax or fee increases but uses a combination of cuts, funding shifts, delayed corporate tax breaks and assumptions about money the state hopes to receive”. The budget gave rise to other dependent costs such as delayed tax refunds. It was uncertain that the State will receive the required funds from the federal government to ensure that the important programs will function the way it used to be until the funds are received.
One of the important drawbacks of the budget was the cuts and delays in education funding. As published in the article “California lawmakers pass long-overdue budget” (2010), by Fox News “Under the deal, nearly $2 billion in payments to K-12 schools and California's community colleges would be delayed until the next fiscal year”. This was one of the consequences of the late deficit budget, which lawmakers agreed upon. Stopping payments to educational institutions was not seen as a positive feature of the budget. The delay in funding kept the educational programs on hold, which affected many educational
But having a budget is a good step in the right direction. Continuous reexamination is necessary to keep the budget on track. A potential reform for the federal budget is the switch from a short-term budget perspective to a long-term perspective (Budget & Projections, 2015, p. 1). This switch can be beneficial for several reasons. The main beneficial reason is having a greater outlook. Having a greater outlook on future budgetary effects can help policymakers make better-informed decisions in regards to the federal budget. Another potential reform for the budget is to commit and concentrate on spending control. In order to reduce the debt, spending must be under control. A good policy must be in place to ensure the control on spending is a continuous effort by the
Overspending is a pertinent problem facing the lawmakers in Congress. In 2012 discretionary spending reached $1.3 trillion and mandatory spending $2 trillion, while only bringing in $2.5 trillion in revenue. Since the turn of the century back in 2000, non-mandatory spending by the government has topped out a whopping $16.1 trillion just in the past 13 years (Boccia, Frasser & Goff 2013). This persistent overspending on programs and services that are not necessary to the functionality of the country is what is causing the deficit to rise year after year. To remedy this issue the government must either increase the revenue it brings in through taxes and trade or reduce the amount of money it spend or perhaps even both. In 2012 thirty-one cents of every dollar that Washington spent was borrowed (Boccia, Frasser & Goff 2013). Most of which went to large programs such as Social Security and Medicare and if these large, growing programs, or just the budget in general, do not undergo financial reform it could spell disaster for the economy and fiscal state of the nation.
“To budget is to fight over money and the things money buys” (Document A). The federal budget is adjusted every year and has to follow certain criteria set forward by the Preamble to the Constitution. The Preamble sets five goals that the budget must fulfill, these goals are: to establish justice, to insure domestic tranquility, to provide for the common defence, to promote the general welfare, and to secure the Blessings of Liberty to ourselves and our prosperity. Furthermore, it is difficult to decide what clusters of the federal budget to allocate money to in order to meet the five goals of the Preamble which are “The Big Five”, “The Middle Five”, and “The Little Guys.” In each of the three budget clusters,
What is interesting to note is the rating given to ‘Power of the Legislature to Change Governor’s Budget’ which was 1 on a 1 - 5 scale in a study conducted by Dr.Thad Beyle. This shows the CA governor as wielding a certain amount of influence in the legislature’s passing of his proposed budget, Of course, the constitution mandates that the budget be balanced and, if not, then the previous year’s budget remain effective. This already puts limitations and expectations in the budget’s formulation.
There are some differences and similarity between the State and Federal budget. The Federal budget is bigger than the State budget. The federal government have the sovereign bank. The Federal government have the ability to print additional money when the need arises. The federal budget needs not balance revenues and expenditures for each fiscal year. At the subnational level, appropriations must not exceed revenues in the State budget. This creates restriction which is mandated for almost all the state and local finances. “This imposes a discipline at state and local government which the federal government may chronically evade. States cope by setting aside reserves in good years to hopefully cover deficits in bad revenue years” (n.d., 2012).
In the article “The New Normal” by David Brooks, he states that there are many issues involving the national budget that need to be addressed. Brooks first exclaims that in order to begin to solve the issues, the citizens of the nation need to make it so that everyone is affected by the different cuts. Not just one group of people. The author also states that we need to trim from the elderly to invest in the young considering many schools and their programs are experiencing sizable budget cuts due to lack of funding. The final law that Brooks discussed was that government officials should, under no condition, cut without an evaluation process.
courses, summer school, advanced placement, special education, and other programs will be eliminated (Martinez, 2009). Not only do these cuts have an effect on K-12, they also encumber community colleges, state universities, and state colleges. At the college level tuition prices continue to climb, class availability declines, limits on new enrollments, and cutting educators. In January of 2011, Governor Jerry Brown of California proposed his budget cuts and state universities would be taking another cut of $1 billion, leaving alone elementary and secondary schools (Christie, 2011). While politicians stress education is important to improve the quality of one’s life, they also illustrate it is expendable.
Limiting what revenues can be used for funding puts unnecessary strain on the budget and causes different areas that are significant to suffer. Alabama’s highly restrictive fiscal environment is a significant problem.
How does the Illinois State Budget Impasse compare with those of other states in the nation? Every year governors on the state level and the president on the national level propose a fiscal budget for the following fiscal year they believe will best strategically and responsibly allocate funding to various programs and departments to best serve their constituents. The federal fiscal year spans from October 1- September 30th (the following calendar year) and the state fiscal year spans from July 1-June 30 (the following calendar year) for nearly all states, except for the four states which mirror the federal fiscal year. Like the president and governors, Congress and individual state legislatures/General Assemblies propose their own budget they
The federal government and states each have budgets that outline the amount of money that will be collected from taxes, how much will be spent in revenues, and what programs will receive money allocated to them from these expenditures. Every fiscal year, the federal budget and state budgets are reset so that they start from October 1st until the end of September of the following year. The federal government’s budget contains allocations for health care, pensions, education, defense, and welfare. The State of Colorado’s budget contains expenditures allocated to education, health care, pensions, protection, transport, and welfare (Chantrill, 2015). The
As the federal debt grows, the search for ways to reduce spending or establish new revenue sources will increase. “If states are to be the laboratories of democracy, they need the freedom, power and flexibility to innovate, create and adapt policies that best meet the needs of their citizens. ”William T. Pound is executive director of the National Conference of State Legislatures. State and Central government will always have a high expense rate.
The element that causes a program funding to go down is the fact that a two thirds majority is required for any increase in taxes to occur. This is with every member, not just those that are present and voting. While in the past, this has not posed as great of a problem, currenty the majority of the Republican Party are against any tax increases, creating a deadlock where no tax can be increased due to no way to get a two thirds majority in a vote. The problem with the lack of tax increase, though, is that the burden of the state budgeting crisis ends up effecting lower income residents that rely on public services. In 2012, a Democratic supermajority of seats were won, meaning they could finally raise taxes wihtout any Republican support.
Report by the Legislative Analyst's Office that predicted a severe budget shortfall meant that most of the California public school students were to experience shorter school year. Governor's tax measures tried to solve the cuts of public school financing. Menifee district depended on Governor Jerry Brown's initiative or the education to face $5.5 billion, thus advising school districts plan for the worst case scenario in their endeavors to come up with their 2012/2013 budget.
The state of California along with many other states has gone through periods of recessions. The major difference between California and other states is the difference how California manages the state budget. The California governor creates a budget and is sent to the Department of Finance. The Department then modifies the budget according to the likings of the governor. The governor can have a deficit but must fit the deficit into next years budget. A deficit refers to a shortage of funds and can create problems when creating the state budget. If there is a surplus (abundant amount of revenue) in the budget then the governor has the power to create programs that are politically advantageous. During times of financial crisis the process of
Budget cuts in schools cause turmoil and stress among the students and faculty. Drastic changes in the budgets have caused schools to negatively impact the people around them. With the lack of funding, schools are facing difficult decisions on what to do to stay within their budget. Supervision is facing much scrutiny on how to handle the lack of funding in their school districts. A solution needs to be made to improve the distribution of funding to our schools in order to keep them operating and thriving for our children to obtain their education. Budget cuts in schools have shown negative effects on employee positions, supplies, extracurricular activities.