Week 2: Politics and Dynamics of Public Budgeting

• Budgeting: political or technical?

• The “baseline”

• Rubin’s 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

Public Administration “Dichotomy” Debate

Classical Public Administration: 1880’s - 1930’s• Focus on efficiency of large organizations• Search for scientific principles of administration• Expertise, not politics• Left out concern for politics, values, ethicsBehavorial: 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

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

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

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)

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

Political v Technical

• Budget as a Document

___% technical

___% political

• Budgeting as a Process

___% technical

___% political

• Budget Management

___% technical

___% political

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

Rubin’s Model of Budgetary Decision Making

– Environment

– Process

– Strategies

– Outcomes

Rubin’s 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

Actors in Public Budgeting

• Chief Executive

• Executive branch chiefs

• Control agencies

– executive

– legislative

• Legislators

• Interest groups

• Public

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?

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

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

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)