Academic journal article Public Administration Review

A Quarter Century of State Budgeting Practices

Academic journal article Public Administration Review

A Quarter Century of State Budgeting Practices

Article excerpt

In this article, I examine trends in state budgeting practices that have developed over the last quarter century and particularly those changes that have materialized between 1990 and 1995. One would expect state budgeting practices in 1995 to be markedly different from those of 1970 given the passage of time and the waves of budget reform efforts occurring during that time (Botner, 1985; Howard, 1973; Lauth, 1993; Rubin, 1992; Schick, 1971). Four main topics are considered here: budget preparation and budget documents, program analysis, accounting, and budget office personnel.

The analysis is based on surveys of state budget offices conducted in 1975, 1980, 1985, 1990, and 1995. Information also is available for 1970 because the first survey asked about that year as well as 1975.(1) Responses from the states and the District of Columbia were high-50 in 1970, 50 in 1975, 48 in 1980, 43 in 1985, 47 in 1990, and 51 in 1995.

This study is perhaps the longest running one on public budgeting (Lee, 1991a). Although survey data suffer from the necessary subjectivity of respondents, this set of surveys provides insights into how state budget offices perceive their operations and those of other state agencies operating in the realm of budgeting and finance. As will be seen, noticeable trends emerge from the data, and it is significant that these trends are the result of different budget directors and political administrations responding over time to the same set of questions. (An alternative to the survey method is the case study; see Clynch and Lauth, 1991.)

Budget Preparation and Budget Documents

Preparing a budget proposal that suggests a set of recommended policies and stays within whatever financial limits are considered politically realistic has been a prominent issue in public budgeting (Bunch and Straussman, 1993). One approach is to set specific dollar ceilings on budget requests. This approach has the distinct advantage of making agencies prepare requests that include only financially feasible options (Lee, 1992). This method is often called fixed-ceiling budgeting. The opposite approach is to provide no ceilings of any sort, allowing agencies to recommend funding programs at levels they consider appropriate.

Table 1 shows these two approaches (first and last rows). The dollar-level-ceiling technique has been steadily gaining in popularity. Nearly half of the states now report using such a method. The no-ceiling approach, in contrast, has gone up and down in popularity but the general trend is downward. No-ceiling budgeting was reported in 59 percent of the states in 1970 and only 28 percent in 1995.

Table 1
Budget Ceilings Issued by Governor for Use by
Agencies in Request Preparation, Selected Years, 1970-1995

                                                Percentage Providing
                                                       Ceiling

Type of Ceiling                                         1970

Specific dollar-level ceilings                            0
Policy ceilings, which encourage or retard
the growth of certain types of programs                  16
Instructions to maintain only a minimum level
  of services                                            --
Instructions to maintain the current level
  of services                                            --
Instructions to include necessary program
  improvements                                           --
A requirement of a ranking of priorities
  among programs                                         --
No ceilings of any kind                                  59

Type of Ceiling                                         1975

Specific dollar-level ceilings                           18
Policy ceilings, which encourage or retard
  the growth of certain types of programs                42
Instructions to maintain only a minimum level
  of services                                             0
Instructions to maintain the current level
  of services                                            17
Instructions to include necessary program
  improvements                                           26
A requirement of a ranking of priorities
  among programs                                         28
No ceilings of any kind                                  43

Type of Ceiling                                         1980

Specific dollar-level ceilings                           23
Policy ceilings, which encourage or retard
  the growth of certain types of programs                45
Instructions to maintain only a minimum level
  of services                                            20
Instructions to maintain the current level
  of services                                            44
Instructions to include necessary program
  improvements                                           50
A requirement of a ranking of priorities
  among programs                                         73
No ceilings of any kind                                  28

Type of Ceiling                                         1985

Specific dollar-level ceilings                           37
Policy ceilings, which encourage or retard
  the growth of certain types of programs                49
Instructions to maintain only a minimum level
  of services                                            24
Instructions to maintain the current level
  of services                                            56
Instructions to include necessary program
  improvements                                           61
A requirement of a ranking of priorities
  among programs                                         68
No ceilings of any kind                                  33

Type of Ceiling                                         1990

Specific dollar-level ceilings                           45
Policy ceilings, which encourage or retard
  the growth of certain types of programs                60
Instructions to maintain only a minimum level
  of services                                            24
Instructions to maintain the current level
  of services                                            61
Instructions to include necessary program
  improvements                                           65
A requirement of a ranking of priorities
  among programs                                         89
No ceilings of any kind                                  11

Type of Ceiling                                         1995

Specific dollar-level ceilings                           48
Policy ceilings, which encourage or retard
  the growth of certain types of programs                63
Instructions to maintain only a minimum level
  of services                                            26
Instructions to maintain the current level
  of services                                            62
Instructions to include necessary program
  improvements                                           61
A requirement of a ranking of priorities
  among programs                                         78
No ceilings of any kind                                  28

-- These questions were not asked for 1970. … 
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