Naively Optimistic Thoughts on Budgeting

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Michael R. Ford
October 9, 2023

The other week I was an invited discussant at a book talk related to state and local budgeting. You do not have to ask me twice if I want to talk budgeting, so I offered my usual enthusiasm for the budgeting process and document, arguing:

1. Budgets are the contract between the government and the governed, and as such, have the capacity to increase or erode trust in government.
2. The budgeting process is the ultimate exercise in democracy, the ways in which all the political disagreements and contradiction in our society get sorted out in a state or local spending plan.
3. When done well, budgeting increases trust in government. When done poorly it accomplishes just the opposite.

The main speaker gave me some good-natured ribbing about my thoughts on budgeting. Basically, he said while he appreciated my enthusiasm, I was way too naïve in my passion for budgeting. His main points, that nobody actually reads budgets, and that Certified Annual Financial Reports are much more useful for research purposes, were well taken. Who does actually read budgets? I know my 36 budgeting students do, because I make them! I know my City Council colleagues do because it is part of the job. But do regular people? How can a contract between the government and the governed have meaning if one side of that contract treats it like an Apple terms of service agreement, (i.e., unread).

Getting residents to engage with the budget begins by making them something worth engaging with. It starts with the narrative. A good budget document tells the story of a municipality, what it cares about, where it has been and where it is going. More to the point, a good budget document articulates the path by which community goals will be met. The narrative, the numbers, performance indicators and explanations of how the organization will be held accountable for results should all be part of the document.

However, even if a budget incorporates all the aforementioned elements, most people will not read budgets. At least not at first. My standard pitch to municipal leaders is to begin by making your budget something that is useful as an operational document. It is easy to use a budget to plan, but the best budgets are those that provide guidance to an organization on a day-to-day basis. How? Make the budget more than a document! One way is to turn a budget into an interactive website featuring up-to-date dashboards containing detailed fiscal, demographic and performance information available to all. While the budget document is the foundation, the dashboards can highlight how the budget is actually progressing in real time.

I realize none of this is revolutionary, municipalities track fiscal and performance information in real time anyways. But, taking that next step to ensure it is universally accessible in a visually pleasing manner can facilitate broader use of that information within the organization, and eventually, outside the organization. In addition to a website, a municipal budget app can put detailed fiscal and performance information at the fingertips of staff, policymakers and residents.

As for the issue of a lack of comparable data in local budgets, I would argue the failure to include comparable numbers in an operating budget is very much a choice. In most states, including my state of Wisconsin, it is required that certain information be reported to the state in a comparable manner. Often this information sits buried on state website. But seeing as it needs to be reported anyway, why not include it in the budget document and website? The common theme in these ideas is making the most of information that you have to produce anyways. Local government is awash in reporting requirements, inevitably some reporting will be busywork dictated by state mandate, but to the extent we can use required data activities to practical effect we should (and many places do!).

My ultimate hope is that better presentation of, and interaction with, local budgets has a disarming effect on those most skeptical of local government. There is a huge difference between having to ask for important information, and simply being able to access important information. The former can create the impression that government is hiding something while the latter gives the resident agency. Will we ever get to a place where a critical mass of people read local budgets? Probably not. But that does not mean we should not constantly work to improve our processes and presentation.

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Author: Michael R. Ford is an associate professor of public administration at the University of Wisconsin Oshkosh, where he teaches graduate courses in budgeting and research methods. He frequently publishes on the topics of public and nonprofit board governance, accountability and school choice. He currently serves as an elected member of the Oshkosh, WI Common Council.

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