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The Design of the Creative Multi-Year Local and State Budget

budgetingBy Dr. Pamela Scales
Professor of Public Administration, American Public University

Budgeting has been an imaginative adventure these days. Short term plans and solutions are no longer viable. This past recession has shown everyone in government that long term planning is a necessity. Even if your state did not experience the severe impact of the recession or has fully recovered from the recession you see the potential issues that can occur. It is only prudent to take heed to what has happened elsewhere and try to ensure it so that it does not happen to you.

Biannual and triennial budgets are becoming more common place. Implementation can present challenges though. You need systems that can accommodate budgets for multiple years. You have to design procedures to coordinate and update multi-year plans. Most importantly you have to change your thinking about projects and services. What do you want to do over the next several years? What will your population be? What are the demographics of the citizens? What is the state of your infrastructure? How do you implement projects? Who should implement? It is definitely easier said than done.

We had a team of consultants who looked long term. They developed plans (with a lot of assistance of city employees) that should provide a level of service that is needed in my community. They looked at the questions asked above and came up with pretty good solutions. Viability of the plan was a critical component examined by everyone. It appeared that everyone was on the same page. But the issue came with implementation. A plan can simply be a piece of paper, a dream, or a wish. When it is actually part of your budget it becomes real. When you see the dollars that you will be held accountable to, it becomes more than a plan. When you see the number of employees that you have it becomes real. Now everyone has to take responsibility for the plans, discussion, and research that happened earlier in the planning process. Because it is multi-year it should not be changed easily. Multi-year budgets have to have flexibility built into them for changing environments. The plan has to open to better solutions and new ideas, but the changes have to be researched, evaluated and planned considering the long term as the original plan did.

I think of my son who will go to the store and buy a video game on a whim. If he decides he does not like the game he will sell it back (for pennies on the dollar) and ask me for more money for a new game. When I talk about our discussion when he bought the game (are you sure this is what you really want?), he does not seem to remember. But when I tell him there is no more money he leaves disappointed and wishing he made a better choice.

This process will greatly improve our financial management in government and our promises to citizens. The implementation may not be painless but definitely a long term benefit to all.

About the Author

Dr. Pamela Scales holds a Master of Business Administration from the University of Detroit Mercy and a D.B.A.. in Business Administration from University of Phoenix. She is currently an Adjunct Professor of Public Administration at APU. She is Budget Director for City of Detroit, Michigan.

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