Budgets Flashcards
Line-item Budgeting
Emphasizes project the budget for next year while including inflation. Short term focus, 1 year.
Pros: easy to understand. doesn’t require evaluation of existing services, easy to prepare and justify.
cons: lacks flexibility, lack of a relationship between requests and objectives of an organizations. Doesn’t look at programs overall, just individual expenses
Planning, Programming, Budgeting Systems
PPBS focused on planning through accomplishing goals set by a department.
Pros: helps depts place their programs in perspective and evaluate effort/accomplishments
cons: time consuming, requires measurable goals/objectives. Heavy info requirements.
Components of Planning, Programming, Budgeting Systems
Budget organized by program area (includes program mission statements, objectives, and indicators of success);
Long-range planning of goals, programs, and required resources;
Policy analysis, cost-benefit analysis, program evaluation.
Zero Based Budgeting
Emphasizes planning and understanding within all parts of an org.
Pros: requires a dept to consider all parts of operation and look at why it does things the way it does
Cons: time consuming to justify every single activity of a dept. Limited success because so info intensive and limited benefits to managers.
Components of Zero Based Budgeting
Efficiency and effectiveness of programs to be re-evaluated on a regular basis;
Agencies to prepare “decision packages” for each program that looks at the impact of “low”, “medium”, and “high” funding;
Decision packages of all programs ranked by executive; facilitates budget cuts by City Council.
Performance Based Budgeting
Links budget to performance measures. Meeting performance goals means funding increases.
Pros: dept develop and evaluate performance standards
Cons: time consuming, goals/obj must be measureable which can be tough and measure the wrong thins
Components of Performance Based Budgeting
Use of traditional function/object budget;
Performance information on workload, productivity, outputs, and outcomes;
Performance and spending may be linked through cost analysis, and program evaluation.
Pay-As-You-Go
uses current funds to pay for capital improvement projects;
General Obligation Bonds
are voter-approved bonds for capital improvements. GO Bonds use the tax revenue of the government to pay back the debt;
Revenue Bonds
use a fixed source of revenue to pay back the debt. For example, revenue bonds could be issued to pay for a new water main. The debt would be paid back through the water use fees. Revenue bonds are commonly used to finance utility improvements and special facilities, such as baseball stadiums.
Reserve Funds
are ones that have been saved for the purchase of future capital improvements;
TIF
allows a designated area to have tax revenue increases used for capital improvements in that area. The increase in the value of property results in increased tax revenue. The increment of increase in tax revenue is used to pay back the investment made in the area.
used in disinvested areas.
Special Assessment
allows a particular group of people to assess the cost of a public improvement
Lease-purchase
allows a government to “rent-to-own.”
3 types of taxes
Progressive - tax ^ as income ^
Proportional- tax rate is the same regardless of income
Regressive- tax rate decreases as income rises
Items to consider when implementing a tax
Fairness Certainty Convenience Efficiency Productivity Neutrality
Types of revenue
Taxes, user fees, intergovt transfers, property taxes, local option taxes, regulatory fees, impact fees, special assessments, development exactions
What are two examples of local-option taxes that are not property tax?
Sales tax or individual/corporate income tax
How might a sales tax affect land development?
Retail locating near the boundary of the jurisdiction to avoid sales tax
What is difficult about a Community Benefits Agreement?
Can be political and hard to get passed.
What is the difference between a General Obligation Bond and a Revenue Bond?
GO Bond: backed by the credit of a city and power of city to tax it’s citizens
Revenue Bond: backed by specific stream of revenue, like a stadium
What is the difference between a BID and a TIF?
BID: group bands together to funnel money through a tax and put into improvement of the district
TIF: increase in tax rev from redevelopment is used to pay off bonds from building
What type of budgeting originated with the defense industry?
Planning, programming, and budgeting systems
Participatory Budgeting
a democratic process in which community members directly decide how to spend part of a budget
How is a CIP related to a comprehensive plan?
A way the comp plan is implemented
What is a “cap rate”?
Rate of return on a real estate investment property based on the income that property is expected to generate.
Net operating income divided by current market value.
Net operating income
Gross operating income minus operating expenses
What is the difference between fiscal impact analysis and economic impact analysis?
FIA projects the cash flow to the public sector
EIA focuses on the cash flow to the public sector
Is there a difference between CPM and PERT?
They are both project management techniques. Although there are difference, they are often used together.
What is a GANTT chart?
Kurt’s chart.
Used in project management to evaluate project tasks, personnel assigned to tasks, and associated timelines. Helps to identify potential conflicts.
