Appropriating Vs. Budgeting: A Comparison of Municipal Fiscal Processes

Conceptual and operational differences between the municipal fiscal processes of appropriating and budgeting are examined. Examination is within the framework of Illinois practice, in which some cities prepare an operating budget while others prepare only an appropriation ordinance. The author finds that there are indeed conceptual and operational differences; budgeting is conceptually a more formal and multi-dimensional process than appropriating, and such differences are reflected in the practices of Illinois cities. However, the operational differences are generally of small magnitude. The author recommends that initiation of a budget system be accompanied by programs for infusing fiscal decision making with new concepts and skills.