Public Budgeting, PLS 492-503

 

M.Dluhy

 

Budgetary Process and Incrementalism

 

 

I.                    General Observations about the process

 

·        The process is inherently political and is dominated by compromises, bargaining, coalition building, etc.  This is not an analytical exercise

·        Because process is segmented and there are distinct phases, a wide variety of actors have a chance to have input

·        Budget is open to external changes in environment and is responsive to crises (Earthquakes, Hurricanes, Tornados, Riots, Financial Bailouts, Shortfalls, etc.)

·        To understand budgeting you need to focus on actors and strategies, a view from the bottom.  How is budget put together piece by piece.

·        Also focus on macro budgeting or the system perspective, the setting of priorities.  How is this done?  Then bring the macro and micro view together.

·        Incrementalism and decrementalism,  changes up or down each year tend to be marginal and predictable.  90% of the budget is probably what it was last year with a small adjustment up or down depending on revenues.  Big winners and losers are the exception, not the rule.

 

II.                 Characteristics of the process

 

·        Budgeting is experiential—deal with hard problems by making rough guess and let experience accumulate.

·        Budgeting is simplied—try to compare large simple items (FTEs) not complex items.  Judge officials, not programs.

·        Budget officials satisfice—accept  goal levels that met the minimum, not optimum.  Incrementalism is an aid to complex calculations.

·        Budgeting is incremental—marginal adjustment of last years decisions.  Budget centers on relatively small increments to an existing base.

·        Fair share—base will be the same from year to year and total budget increase will be stable and most will demand fair share, a few will get cherry-picked for large increases or decreases.  Protect base and inch ahead.  Right-sizing in government is rare but it does happen occasionally—especially during or after crises, Charlotte, Miami, New York, Phila., etc.

·        Major conflicts between agencies and budget shops and executives and legislative bodies.  Perspectives are quite different.

 

 

III.            Successful bureaucrats in the budgetary process