Budgeting for Our Times: Target Base Budgeting

Target base budgeting sets limits on how much a department may request in its budget. Departments must submit two budget requests—one within the target base and another for additional funds. Some supplemental requests may be funded from a reserve pool. Target base budgeting has been used in parts of the federal government over the last forty years. Its use continues to slowly expand. This article examines the experiences in three cities: Rochester, Tampa, and Phoenix.     

The Budget Enforcement Act in 1991: Isometric Budgeting

The immediate effect of the Budget Enforcement Act (BEA) of 1990 was to cancel a pending $110 billion sequester and to change the Gramm-Rudman-Hollings deficit targets. These and other changes allowed Congress and the administration to escape responsibility for increases in the deficit if discretionary spending was kept within the caps and no new entitlement programs or revenue enhancements were added. This assumption and others relating to the empowerment of the Appropriations Committees and the new authority of the OMB are explored in this article.     

The Budget Enforcement Act of 1990: The Path to No Fault Budgeting

The Budget Enforcement Act of 1990, included in the controversial and comprehensive budget legislation passed by Congress in October, makes a number of significant changes in federal budgeting. It shifts the focus of the budget process from deficit reduction to spending control, provides five-year spending totals and mini-sequesters for defense, international and domestic appropriations, and puts entitlements and revenue expenditures on a pay-as-you-go basis. The Gramm-Rudman-Hollings deficit targets have been raised substantially, Social Security surpluses taken out of the deficit calculation and allowance made for further adjustments for inflation, Operation Desert Shield, and other emergency spending, minimizing the prospect for general sequestration. OMB has been given important new estimating authority and the roles of the congressional committees involved in budgeting have been altered.     

Perceptions on Federal Budget Reforms: Public Budgeting Researchers' View

This study examines budget experts' perceptions on suggested federal budget reforms. Based on the response of a group of selected public budgeting professors (N = 46), the study identifies several specific reforms that are supported by the experts from both the viability and adoptability consideration. The study also reveals the fact that the respondents are less optimistic about the adoptability of the suggested reforms even though they generally agree with most of the reforms. Addressing the federal deficit problem, the authors further discuss the implication of the experts' perceptions on federal budget reforms.     

Rules and Flexibility in Public Budgeting: The Case of Budget Modernisation in Australia

This paper explores the features of public budgeting that make it resistant to efforts to balance central oversight and situational flexibility. Its aim is to help explain why systemic efforts at budget modernisation in the name of ‘devolution’ may have failed to deliver expanded budget flexibility. After defining flexibility, and briefly surveying how it can be inhibited by budget practices using the example of collaboration, the paper applies a taxonomy of general ‘budget rules’ to illustrate the trade‐offs between control and flexibility. It uses an analysis of budget reform in the Australian federal government over the last 30 years to identify a key set of ‘legacy reforms’ – all intended primarily to enable budget flexibility – to show how their design and redesign were purposed as modification to the general rules, and how, ultimately, they were constrained by them.     

From Performance Budgeting to Performance Budget Management: Theory and Practice

This article examines the decades‐long practices of performance budgeting in different countries and their associated challenges from a multilayered institutional framework. Based on theory and lessons learned, the article recommends an array of strategies to address institutional and organizational barriers. It also proposes to reconceptualize performance budgeting as a performance budget management system and suggests how multiyear budget planning, financial risk assessment, policy planning, the departmental budget cycle, the program budget cycle, stakeholder engagement, regular spending reviews, and performance audits should be integrated more closely to address the long‐term fiscal challenges faced by many governments and to respond to the public pressure on agencies to do more with less.     

The Reiterative Nature of Budget Reform: Is There Anything New in Federal Budgeting?

This article will attempt to demonstrate the limitations of budget reforms to bring about fundamental change in budget outcomes. In an effort to determine the extent to which these reforms have had any lasting effect, the author first discusses the history of federal budgeting since the advent of the executive budget in 1921. Second, the author reviews three reforms that are prominent in the U.S. Congress current budget debate—enacting fixed budget targets, granting the president increased power in the budget process through enacting a line item veto, or implementing a performance-based budget. Lastly, the author will cite the limitations of each to bring about lasting changes in budget outcomes or decision processes.     

Budget Appraisal—The Next Step in the Quest for Better Budgeting?

Noting that budgeting now represents the most important instrument of governance, transcending the traditional role of legislation, and also noting that recognition of this development stimulated a search for better methods, which is still underway, the author explores the possibility of using periodic, criteria-based appraisals to encourage governments to adopt exemplary practices. Surfacing after World War II, dissatisfaction with budgetary practice led to continuing experimentation with alternative formats and procedures. Although the alternative approaches reflect different standards, they also share similarities, which can provide a foundation for the construction of an exemplary model of public budgeting, embracing critical dimensions of the budgetary process. Further noting the constructive impact of auditing standards on accounting practices and financial reports, the author suggests that the post-audit model may be applicable to budgeting. Experimenting with this model is advanced as a likely next step in the search for better budgeting methodologies.     

Deficits, Soft Budget Constraints and Bailouts: Budgeting after the Norwegian Hospital Reform

In the 1990s, the Norwegian hospital sector was characterized by soft budgetary constraints and increasing budget deficits. This was one of the main antecedents of the 2002 hospital reform, where the central state took over ownership of the hospitals from the counties. Arguably, the centralization of ownership, financing and production would harden the budget constraints and increase the budgetary discipline. This analysis shows that this has not been accomplished. Instead, the production has been far above what was planned, and the deficits higher than ever. Two stages of the post-reform budget processes are analyzed: first, the stage where the central state set the budgets and sends signals of budgetary rules (whether the state sends signals of soft or hard budget constraints), and second, how the central state handled deficits in the hospital sector as they emerged (whether the hospitals was bailed out or not). The conclusion is that the central state neither set a hard budget constraint nor managed to stay firm as deficits turned up. It is argued that three mechanisms explain the prevailing problems of managing the hospital sector: uncertainty of the hospitals' financial situation during the transition phase; minority governments; and specific features related to the organization of the budgetary process in parliament.     

The "Ball of Confusion" in Federal Budgeting: A Shadow Agenda for Deliberative Reform of the Budget Process

The budget process is seriously flawed, as Irene Rubin suggests, but there is little prospect for its effective reform. Current economic and political conditions could open the window for reform, but the excessive partisanship that helped create these conditions also has reduced the pool of institutionalists who could lead reforms. More important is confusion about which reforms might be most effective. Most proposed reforms would create more rules, but they will not work unless politicians commit to meeting the goals such rules are intended to support. Those commitments could be produced by deliberation over critical issues that have been neglected in recent discussions of budget process reform: how the process could support macroeconomic policy making, how improved budget concepts could accurately measure finances and aid in dealing with upcoming policy challenges, how reorganization could enable intelligent priority setting, and how the process could be better aligned with the constitutional sharing of powers and the electoral system.     

The Profession of Budgeting

Budget practitioners may have difficulty in defining a common academic ground for preparation for their careers sufficient to permit calling themselves professionals. Nevertheless, senior budget persons share common concerns, including significant changes in their relationships to the political officials of their agencies. These changes may be the result of the transition from incremental budgeting in a time of plenty to a time of scarcity and intense competition for resources.     

Performance Budgeting: The Perspective of State Agencies

Although performance‐based budgeting requirements are pervasive, what remains a challenge is how to gain the support from all stakeholders in the budget process that are essential to the integration of performance information with budgeting. This study examines the perspective and role of state agencies on performance budgeting. The finding indicates that for agencies to conduct performance‐informed budgeting, the focus needs to be on elevating managerial capacity to use performance information, and improving measurement quality. Moreover, it is crucial to recognize that performance budgeting is a collaborative process in which each participant plays a valuable role.     

Budgeting Rights: The Case of Jail Litigation

Judicial decisions are one element in the erosion of local government budgetary discretion. For example, litigation concerning constitutional rights forces local government officials to allocate resources toward the rights-based population. While rights-based allocation decisions may narrow the budgetary discretion of public officials, some managers may, paradoxically, be "better-off"—defined as the ability to protect and defend their budgets — when discretion is reduced. This thesis is tested through a case study of jail overcrowding litigation in a county government.