Developing a budget is one of the most important functions for a local government. It is also one of the most difficult. Identifying priorities, forecasting revenue, addressing competing interests, determining the correct strategies, estimating cost of service, and ultimately allocating a limited pool of resources involves careful planning and effective decision making across an entire organization. While the budget or finance office often leads in preparing the budget, it is truly an organization wide effort that involves leaders and subject matter experts from all lines of business, executive leaders, elected officials and the public.
To address these challenges, several popular approaches to the budget process such as incremental budgeting, zero-base budgeting, and priority-based budgeting have been used by governments. However all have their drawbacks and none all ideal in all situations. As governments now focus extra attention on the budget amid the global recession and COVID19 pandemic, improving the quality of budgeting is important to not only long-term financial sustainability, but also trust in government
The notion of launching a project to improve local government budgeting is a familiar one. GFOA’s project will focus on ensuring local governments are resilient and work to answer the questions:
- Why is budgeting important beyond the finance office?
- How can governments best allocate resources during challenging times?
- Which budget practices improve equitable provision of services?
- How can the budget process encourage decision making aligned with community priorities?
- How do we overcome the most significant technical challenges in budgeting?
- How can governments survive, adjust, and thrive during an economic crisis?
GFOA expects to present results from this project in mid-2021. However, intermediate findings and research reports will be release as available. We are currently working to recruit members for several advisory committees and research teams that can help inform this project.