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