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Tonight’s Bill of Fare
1. Lecture on how to be successful in the budget process.
2. Present some of the unique characteristics of Capital Budgeting.
3. We will do a Matrix exercise in class.
4. Guest Speaker Robin Campbell.
5. We will seminar.
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Budgeting
[Video of President Obama, speaking about the significance of the budget]
Concludes with the budget enables an America to be “A place where all things are possible for all people”.
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• A public budget can be seen as the accounting for a temporary truce over conflicting interests and philosophies. Those conflicts are big:– The nature of humans– The appropriate role/size of government and the private sector– Individual vs. collective responsibility and much more– Whose friends are rewarded and enemies punished
• The budget process itself is political and can be designed in ways that influence what it pays attention to and what it ignores, who wins and who loses.
• Always keep in mind that public budgeting is a political act filled with compromise and deals.
Dzieza’s Macro View of Budgeting"War Budgeting is a mere continuation of politics by other means“
-- Carl Philipp Gottlieb von Clausewitz, 1780-1831
“Laws, like sausages, cease to inspire respect in proportion [to how much] we know about
how they are made.”
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Budget News
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Agency Near GF-S Total Voc Rehab (DSHS) -0.8% 26.6% Levy Equalization 50.3% 25.1% State Board of Accountancy 0.0% 21.0% UTC 0.0% 15.8% DOH - 5.3% 15.6% Archaeology & Historic Preservation 1.2% 14.4% Military -10.1% 14.0% Agriculture 20.9% 11.4% WA State Health Care Authority -5.4% 9.2% ESD 0.0% 4.6% LTC (DSHS) -1.8% 4.0% DOR 3.1% 3.9% Econ Services (DSHS) 0.1% 3.6% Mental health (DSHS) -1.7% 3.2% Veterans -4.0% 2.8% Juv rehab (DSHS) 2.4% 2.2% Medical Ass't (DSHS) -2.7% 2.0% OSPI - Public School 1.9% 1.1% Schools General Apportionment 1.0% 1.0% Children Family Services (DSHS) -1.4% 0.6% DD (DSHS) -5.0% 0.5% UW -4.2% 0.4% Corrections -1.7% 0.3% Ecology -5.7% 0.2% DIS -.3% 0.0% Alcohol and Substance abuse (DSHS) -1.4% 0.0% Parks and Recreation -5.6% -0.3% L&I -8.6% -0.7% GA 193.9% -2.0% Evergreen -9.0% -4.1% Admin support (DSHS) -8.8% -8.3%
% change from original 2009-11 budget due to action on the Supplemental Budget.
Randomly selected from LEAP, Agency Detail.
Budget News
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Budget Forecast
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• [Lead in: Budget forecast from the official state revenue forecaster]
• [Video of Star Wars trash compactor scene]
• Text “One thing is for sure, we are all going to be a lot thinner”.
Budget Myths
• Myth 1: You have to be good at math to do budgets.
• Myth 2: Budgeting is complicated.
• Myth 3: Budgeting is best left to experts.
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What is a Decision Package?• Describes contribution to the agency’s strategic plan
and activities.• Performance measures• Impact of the change on agency clients.• A discussion of alternatives• One-time, ongoing and budget costs in future
biennia• Effects of non-funding.• Revenues• Example
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Budget Creation and Success
• That which does not kill us makes us stronger. -- Friedrich Nietzsche
»Useful
»Needed
»Timely
»Affordable
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Useful
• What good is it?
• What will it do?
• What problem is being fixed?
• Why will the public be better off as a result of funding your request?
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Useful
• Are the benefits measurable? • How will you know you are getting the
benefits? • Will you measure them?• Is the request useful to others in similar
situations?
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Needed
• How does it connect with your agency’s mission?
• Does it fit in with what you really need to be doing?
• Is it a recognized part of the strategic plan, GMAP goal, POG strategy, audit finding or other validated need?
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Needed
• Is there a non-budgetary way to deal with the problem?
• Have administrative changes, rule changes, and law changes been tried?
• Can you afford to pay for the increase out of existing appropriations? Either unspent resources as you get near the end of the biennium or next biennium?
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Needed
• Is the need documented? Are there:– Statistics – Surveys – Audit findings – Consultant reports– Notifications of price increases
• Is the amount material? Is it too small?
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Needed
• Is the idea too good for a DP? • Does the request actually pay for itself?
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Timely• Does it address an urgent problem?• How serious are the risks if action is not
taken and why doesn’t it take priority over existing, funded activities?
• Does it promote a Governor’s priority?• Does it promote the priorities of key
legislators?
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Timely• Does the proposal leverage other funds,
like federal grant money?• Is the problem currently visible to the
public or policymakers? For example:– TV news exposes – newspaper articles– letters from the public– surveys
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Affordable• Is there sufficient Fund Balance to pay for
it?• Are there any revenues associated with
the proposal?• Is the amount requested reasonable
relative to the problem to be addressed?• Are the details of what is being requested
reasonable? i.e., excessive travel.
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Affordable• Is there a way to accomplish it without
adding FTEs? For example:– Contracted services– Automation – Offset with FTE reductions elsewhere
• Do you have competitors for the same color of money?
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Other Tips• The sincerest form of savings.• Resist the budget game of giving OFM or
Legislative analysts something to show their value added.
• Prevention overkill: “People will die!”
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Budget Priority Setting
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• [Excerpt from Movie “Dave” demonstrating tradeoffs among programs to find money to fund homeless shelter.]
The Budget Culture
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Budget people need endurance
(Sung to the tune of "Ghost Riders in the Sky")
Some GA staff were walking out one dark and dismal night.
The Insurance Building was all lit up, the rooms ablaze with light.
When all at once a red-eyed cast of homeless souls appeared.
They said they worked for OFM. And they acted mighty weird.
Yippee Ki-yay, Yippee Ki-yo-o.
Budget writers in the sky.
Their faces gaunt, their eyes were red, their shirts all soaked with sweat.
They're writing hard Governor's budgets, but they ain't writ 'em yet.
Cause they've got to work forever in that office in the sky.
On PC's spittin' fire, as they write you hear their cry.
Yippee Ki-yay, Yippee Ki-yo-o.
Budget writers in the sky.
WinSum fixes turn to trash as the system goes to hell,
The legislature gored their budget, and they still ain't rung the bell,
So they ride their desk achained, awishin' they could fly,
From a session straight from Hades, that wouldn't sine die.
Yippee Ki-yay, Yippee Ki-yo-o.
Budget writers in the sky.
As the writers did their thirteenth draft, they heard one cry and moan,
"If you want to see your family before the baby's grown.
Then stay away from OFM, don't work for Len McComb.
You’ll lose your youth and you’ll forget your own way home."
Yippee Ki-yay, Yippee Ki-yo-o.
