Week 2: Politics and Dynamics of Public Budgeting

1
Week 2 Politics and Dynamics of Public Budgeting

• Budgeting political or technical?
• The baseline
• Rubins model of budgetary decision making p.30
• Actors in the budget process
• Mini-case
• Budget process--goals, culture, characteristics
• Student issues from readings
• Preview week 3

2
Public Administration Dichotomy Debate

• Classical Public Administration 1880s - 1930s
• Focus on efficiency of large organizations
• Search for scientific principles of
  administration
• Expertise, not politics
• Left out concern for politics, values, ethics
• Behavorial 1940s - 1960s
• Dichotomy questioned
• From efficiency to effectiveness
• Human element, behavior, decision making in
  organizations
• Led to new kind of science of administration
• Continued to ignore politics

3
Public Administration Dichotomy Debate (cont.)

• The New Public Administration 1970s -
• No dichotomy
• Try to bring managerial and political values
  together
• Two branches
• Public policy
• looked at politics in policy but not in
  administration
• PA moved to Business Schools
• Political management
• the governance function of public administration
• define the role of public managers in political
  system

4
Budgeting as Political

• Budget (document)
• scope of government
• redistribution of wealth
• priorities
• reflects relative power
• reflects public consensus
• accountability to public

• Budgeting (process)
• preparing and defending requests
• strategy--what to reveal, what to conceal
• roles in process--who has power

5
Budgeting as Technical?

• estimating revenues
• estimating costs (benchmarks)
• knowing all rules and constraints
• spending limitations -- legal
• spending requirements
• limits on borrowing
• need for public referenda (spending and revenues)
• different funds
• presenting information
• accounting/allocating (baseline, one-time)

6
Budget Management political or technical?

• Internal allocation
• how much is needed?
• aligning incentives
• Staying within budget
• Reallocation
• Determining and using reserves
• Publication -- how much to reveal
• Transfers among funds
• Year end strategies

7
Political v Technical

• Budget as a Document
• ___ technical
• ___ political
• Budgeting as a Process
• ___ technical
• ___ political
• Budget Management
• ___ technical
• ___ political

8
The Baseline Budget

• How to compute it
• Current year initial budget
• Current year revised budget
• Current year expenditures
• Current services level adjusted forward
  (inflation, caseload)
• Current law
• Current year budget less one-time
• CSUS case study Program of Dance

9
Rubins Model of Budgetary Decision Making

• Environment
• Process
• Strategies
• Outcomes

10
Rubins Model of Budgetary Decision Making

• Environment
• Affects outcomes directly
• Affects strategies
• Affects process
• Process
• Affects outcomes directly
• Affects strategies
• Strategies
• Affects outcomes directly
• Affects process

11
Actors in Public Budgeting

• Chief Executive
• Executive branch chiefs
• Control agencies
• executive
• legislative
• Legislators
• Interest groups
• Public

12
Mini-Case -- Indian Health Program

• What is the committee chair trying to accomplish?
• Why is the Bureau Chief in a difficult position?
• What power does the committee chair have over the
  Assistant Secretary and the Bureau Chief?
• What power does the Assistant Secretary have over
  the Bureau Chief?
• Did the Assistant Secretary do a good job of
  responding?
• Did the Bureau Chief do a good job of responding?

13
Budget Process

• Designed to meet organizational goals
• Reflects organizational culture
• Variables
• players
• rules/procedures/documents/timelines
• balance of executive/legislative power
• degree of centralization/coordination
• top-down/bottom-up
• openness to internal members
• openness to external community

14
Design a Budget Process for a School District

• Units
• 4 elementary schools
• 2 middle schools
• 1 high school
• Players
• superintendent/staff
• school board
• 7 principals
• 7 PTAs

• Process Variables
• roles of various players
• authority/balance of power
• rules/procedure
• documents/timelines
• executive v legis power
• degree of centralization
• top down/bottom up
• openness to internal
• openness to external

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Preview of Week 3

• Lots of different, but short, readings
• Congressional Budget Office
• Legislative Analysts Office
• Department of Finance
• Think about
• Differences between State and Federal Processes
• Different roles of LAO, Finance
• In four sample LAO analyses, think about what
  they are trying to accomplish
• Guest Speaker from Corrections, LAO, DOF
  (current)
• Remember first weekly email assignment (sample on
  web)