Government Budgeting for Dummies — Part 1 Tuesday, Sep 29 2015
Assigned reading for leges
In the late 70s, I worked for the Louisiana House Appropriations Committee. One year Dr. Ralph Waldo Emerson Jones, then-president of Grambling University, came before the committee to present his budget.
“Prez” as he was affectionately known to everyone handed out his budget for discussion. Immediately, the committee members recognized that the difference between proposed expenditures and expected revenues showed a deficit of several hundred thousand dollars.
Prez” just smiled. He said you asked me to present a budget necessary for operating Grambling. He also knew the reality of being able to get the necessary funds were highly unlikely. Rarely, did the lege give any state agency the amount of money they requested because they were known to be inflated.
Budgeting was a game played with the leges. The agency head usually overestimated their budget needs by 20%, knowing it would be cut by 10% which was still 5% more than they needed.
After the agencies received their extra 5% (with no explanation requires, merely rationale) they immediately begin a public relations campaign saying their budget had been cut. While their inflated budget request was cut. In reality, they got a 5% increase over the previous year.
This game allowed the leges to tell their constituents they were being fiscally-responsible with our tax dollars. Nevertheless, the state budget grew annually and public services grew worse (i.e. highways, bridges, driver’s licenses, etc.). This process is called “incremental budgeting” for which there is no benefit to the citizens.
If this type of game was played in the private sector, the department head would be summarily fired.
By telling the truth, “Prez” left the committee with the money he “needed” to run Grambling. Of course, in those days, higher education was a true priority and not merely bait to raise taxes. Today, there’s not a single Louisiana college president worthy of carrying “Prez’s” briefcase.
More of the budget game later.
1 7:00 am