Bringing transparency to municipal budgets: transparent, accountable budgets help build the public trust.
v. dis·cerned, dis·cern·ing, dis·cerns
1. To perceive with the eyes or intellect; detect.
2. To recognize or comprehend mentally.
3. them, which creates a sense of unreality. Municipal budgeting tends to be incredibly detailed but very unrevealing.
A democratic society needs transparent budgets, and they are the responsibility of those who construct them. If the budget presentation or audit report doesn't respond to the citizens' interests, they are not going to pay attention, but their lack of interest doesn't justify poor content. The reason they are not interested is because the budget doesn't answer their questions.
Budget creators must ensure they address the information the citizenry wants and needs to know. Materials and data may be included for legal reasons, but the budget has to be more than a legally compliant document. We need to go from the telephone directory or accounting model of budgeting to a political model of accountability that builds public trust. In addition, only budgets that are accountable and transparent have a chance of reducing political corruption In broad terms, political corruption is the misuse by government officials of their governmental powers for illegitimate private gain. Misuse of government power for other purposes, like repression of political opponents and general police brutality, is not considered political , which flourishes in the shadows.
The first aspect of transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. is defining and highlighting the data needed for specific audiences. To reach these audiences, the budgeter needs to know them, their information needs, and how to highlight that information in a legalistic le·gal·ism
1. Strict, literal adherence to the law or to a particular code, as of religion or morality.
2. A legal word, expression, or rule. document loaded down with other information.
A municipal budget has three major audiences: the financial community, elected officials, and the public (citizens and the press). (The press is characterized char·ac·ter·ize
tr.v. character·ized, character·iz·ing, character·iz·es
1. To describe the qualities or peculiarities of: characterized the warden as ruthless.
2. as part of the public because it generally talks to the citizens, not directly to city hall.) Each of these groups needs to know certain things, and the budgeter must tell them in a way that engages their interest and informs them, in short, creating a dialogue.
Balancing the Budget
The financial community is mostly interested in whether the budget is balanced, not legally but actually. The appearance of the budget and the final results often differ greatly, so financial people want to know the short-and long-term financial history and health of a community--the city, county, or other local government--and its ability and willingness to pay Willingness to pay (WTP) generally refers to the value of a good to a person as what they are willing to pay, sacrifice or exchange for it. See also
Much of the information this community needs is in the annual financial report (which this article does not discuss). If it's not in the annual financial report, it needs to go in the budget document itself, which tends to get more press coverage. This audience wants to know whether the budget is really balanced (or only formalistically balanced), the legal requirements for balance, and when the document is required to be balanced. Often, the balancing is required when the budget is presented, not necessarily throughout or at the end of the year.
Sometimes, the financial community wants to know all the details: what happens to fund balances from year to year, how they are used, and whether this year features a surplus and what's being done with it. The financial community needs to know whether it is being spent on onetime expenditures, such as fixing a bridge in Minneapolis, or on ongoing expenses, like labor settlements. These two situations differ greatly in their implications for the financial health of the community.
Deficits and Contingency Funding
The financial community also wants to know about the efforts made to prevent deficits from occurring, such as rainy rain·y
adj. rain·i·er, rain·i·est
Characterized by, full of, or bringing rain.
Adj. day funds. It wants to know whether the city or county saves a certain amount of money just to deal with times when revenues are not as abundant, when the economy's not doing well, or when a major employer moves out of town--and if there is such a fund, whether it is well funded. Many states, for example, have rainy day funds, but they don't fund them very well, if at all. So, they exist on paper but not in reality. Thus, the financial community wants to know whether it's real and how it works.
It also wants to know the less obvious, such as what might obscure whether the budget is really balanced, the unfunded or underfunded un·der·fund
tr.v. un·der·fund·ed, un·der·fund·ing, un·der·funds
To provide insufficient funding for.
underfunded adj → infradotado (económicamente) liabilities, and the costs in curred for which money has not yet been set aside, for example, pension obligations. Another expense of interest is the capital repair obligations. The City of Chicago is now wrestling wrestling, sport in which two unarmed opponents grapple with one another. The object is to secure a fall, i.e., cause the opponent to lose balance and fall to the floor, and ultimately to pin the supine opponent's shoulders to the floor, through the use of body with a vastly underfunded mass transit mass transit, public transportation systems designed to move large numbers of passengers. Types and Advantages
Mass transit refers to municipal or regional public shared transportation, such as buses, streetcars, and ferries, open to all on a system. There was a major derailment derailment /de·rail·ment/ (de-ral´ment) disordered thought or speech characteristic of schizophrenia and marked by constant jumping from one topic to another before the first is fully realized. not long ago, and it turned out that the city hadn't been inspecting or the inspectors weren't being heeded because no money was available to fix things. The result was loss of life.
These things ought to be transparent in the budget. To make them transparent, the municipality inventories its physical facilities and their conditions and develops a plan for improving their condition, including the cost and money actually put aside. We have the tools to make all of this transparent, and every major community should do so. This type of planning may have prevented the 2007 bridge collapse in Minneapolis.
Another thing that isn't always transparent is the underfunding of services, or service deficits. These include what we should fund but don't and what we do not fund up to the quality citizens expect, for example, underfunding a hazardous materials program. Domestic security is often seriously underfunded, leaving government with major vulnerabilities and our citizens unprotected.
Transparency problems can also be severe concerning interfund transfers. City budgets are set up for accountability on the basis of little pockets of money, each of which is earmarked for a specific purpose. There are legal requirements for the spending of the money when it's in that fund. What happens when it moves to another fund? Or on to yet a third fund? Once the funds have made two hops, they are no longer traceable by an auditor. These transfers can be used to obscure deficits.
Furthermore, all relevant operations of the city should be in the budget, not off-budget entities. These are visible at the national level, but not at the local level. Sometimes, the entities that go unrecorded in the local budget (the dirt swept under the rug) are those that have the financial problems or are major repositories of patronage Patronage
See also Philanthropy.
fairy godfather to Italian Cinderella. [Ital. Opera: Rossini, Cinderella, Westerman, 120–121]
supports Bias in return for political favors. [Fr. Lit. . The budgeter needs to include everything in the budget that should be there.
Finally, end-loading is an issue. We sometimes do that with the budget, putting off our obligations for spending until the far future, burdening future generations so cur cur
a derogatory term for a mongrel dog. rent politicians don't have to face the problems. This ought to be transparent in the budget. We know how to do so, but it is often not dome.
Elected officials need to know who is receiving tax breaks, which they often don't. They do if they have made a particular decision to give a tax break, but they don't know about prior tax breaks or about the costs of these "tax expenditures." Many states record their tax breaks, but local governments generally do not. This area is opaque: we have no idea who is getting the tax breaks, and anything you can't see is ripe for corruption.
Budget Laws and Consequences
Council members need to know the laws that frame the budget, but typically they don't. They want to know why they can't transfer money from one place where they have it to another where they don't. For the budgeter, the bottom line--the analogy from business-doesn't hold here because the budget has more than one bottom line, probably twenty or thirty, and they each have to balance.
Elected officials also need to know the quality of the revenue estimates they receive from their staff, but that's typically not the type of information provided in the bud get. They can figure it out, if they know what they are looking for, but most don't. They don't have the time or the expertise. This is something that can be made very much more transparent quite easily.
In particular, decision makers need to know the consequences of a dollar more here versus a dollar more there. Ideally, the proposed budgets should allow them to see the impact of their decisions, including the improvements they would get now and later. Simply saying the police department gets a 5 percent increase is not transparent. Indicating that the funds will be used to add three more officers who will patrol specific neighborhoods-which should reduce the number of kids who are drawn into the criminal justice system-is much more so. Afterward af·ter·ward also af·ter·wards
At a later time; subsequently.
Adv. 1. afterward - happening at a time subsequent to a reference time; "he apologized subsequently"; "he's going to the store but he'll be back here , you can see whether these expenditures really were effective.
The citizens and media need to know other information. The press wants to know the projects proposed, those that received funding, and those that didn't. This often is not transparent and, again, may have helped in the Minneapolis case, when a project eligible for federal spending was not funded year after year. The press wants to know what was funded instead and why. Both the press and the citizenry want to know whether a city is wasting its money and how efficient its operations are.
Public officials can employ methods to demonstrate that there is no corruption or waste, gaining back the lost public trust. These methods include performance budgeting, which uses benchmarks, best practices, and comparisons with other, high-performing cities.
More broadly, the budget needs to relate to the goals of the community and city council. The goals of the community planning process, if there is one, need to be expressed in the budget. Again, this typically is not the slightest bit transparent. If a community floods, the budget needs to show funds aimed at flood reduction and the results they produced. Similarly, the budget should show how much a city is spending on programs of interest to citizens, such as pothole pothole, in geology, cylindrical pit formed in the rocky channel of a turbulent stream. It is formed and enlarged by the abrading action of pebbles and cobbles that are carried by eddies, or circular water currents that move against the main current of a stream. filling, including the potholes filled each year and details like the tradeoff between pothole filling and resurfacing. (I know that, but only because I have been working with municipal budgets for thirty years. The citizens, council, and financial community don't know it.)
Making Information Clearer
Better formatting is one way to make things clearer. One approach is highlighting, the electronic version of yellow markers in text books. More important, budgeters need to use the Internet much more, making the budget available in downloadable form. Let people make their own analyses. Budgets need to be in a form that allows for questioning and searches using key words. The backup documentation should be available through the Internet.
Cities say, "We can't do this, we can't tell you about the contracts, contractors, and bidding process because it would take up all of the budget." Actually, they can put it on a Web site. Chicago has done so because of charges of corruption (which were probably justified). As a result, city contracts are exposed to much scrutiny. Chicago put them all up on the Web in searchable form. In essence, the city said, "Go look!" It's fun to browse (1) To view the contents of a file or a group of files. Browser programs generally let you view data by scrolling through the documents or databases. In a database program, the browse mode often lets you edit the data. See Web browser. through. The Web site needs to include links to the laws that support the budget, highlighting the legal and illegal. These actions will make municipal budgeting much more transparent and accountable, building the public trust.
Irene Rubin is professor emerita Emerita is a honorary title retained corresponding to that held immediatey before retirement. (associated with retired from service) --Kabir4you2002 11:55, 28 September 2007 (UTC)