Budgets are used in addressing various purposes including management and control as well as communication of goals, successes, the public entity's philosophy and explain the various departmental functions. Public administration professionals must be able to analyze the financial health of an entity by examining the budget. This work will assess how well available budget documents and auxiliary information address each of these functions on the municipal budget as chosen by the writer which will be supported with examples and information for the documents studied. The questions that this study will answer include those as follows: (1) Did the budget message present an adequate overview of the entity and its financial position? Why or why not? (2) What service area (or program) accounts for the greatest percentage of the operating budget? Does the budget provide any information suggesting why this service area is the largest? (3) Within that service area, what category of expenditure (e.g. personnel, supplies) accounts for the greatest percentage of the area's budget? (4) How many funds does the entity operate, and how do these funds differ in terms of the sources of revenue? (5) Is there a separate capital budget and capital improvement program? If so, what does the budget tell you about the entity's immediate and long-range plans for development? (6) What revenue sources does the entity rely upon, and are some greater than others? (7) Are there any indications of the financial health of the entity contained within the documents reviewed? What are they and what do they tell us? (8) Are there financial danger signs which need to be monitored? (9) What is the fund balance for the General Fund and the various enterprise funds? Have they been growing or contracting? Are they adequate, too much, or too little? Why?
Statement of Thesis
Public administration budgeting is a complex process that requires various committees conducting research and reviews on the budgetary needs of a publicly administered office or program.
The budget taken under review in this study is that of Howard County, Maryland. Howard County states a mission of promoting "…an open, responsive government that involves and serves the community, and that provides fiscal responsibility to ensure a solid foundation for the future." (Ulman, 2010, p. 7) These goals will be accomplished through: (1) having a government that is compassionate, friendly, service-oriented, efficient and effective; (2) renewing and reinforcing public confidence and involvement in all the areas of county government; (3) using every tax dollar efficiently (4) emphasizing quality education, health, safety, and welfare for all citizens; (5) developing and implementing growth management tools that well encourage orderly and planned growth in accordance with the principles in the general plan; and (6) creating and implementing comprehensive plans and actions to achieve this mission. (Ulman, 2010, p. 7)
II. Howard County Budget Overview
The Howard County Budget report provides an overview that explains the basics of where the funds of Howard County are spent. The following chart is included in the budget overview.
Howard County, Maryland -- Budget Overview
Source: Ulman (2010)
III. Howard County, Maryland -- Budget Funding
Also provided is an explanation of how Howard County's budget is funded. The following chart is provided in the budget overview as well.
Howard County Budget -- How the Budget is Funded
Source: Ulman (2010)
IV. Howard County, Maryland -- How Budget is Spent
The following chart shows how the budget is spent in Howard County, Maryland.
How the Budget is Spent
Source: Ulman (2010)
Howard County spends the largest portion of its budget on education (55.99%) with public safety being the second largest allocation of the budget at 13.66% followed by public facilities (11.71%), community services (6.30%), capital debt service and reserves (7.08%), general government (3.45%), and legislative and judicial expenses (1.56%).
V. Howard County, Maryland -- Capital Budget & Improvement Program
Howard County does provide a separate capital budget and capital improvement program. The Capital budget is stated to include the funds needed to "construct major government facilities such as roads, bridges, schools, fire stations, etc." (Ulman, 2010, p.50) Capital projects are stated to be funded by various revenue sources that include: (1) bonds; (20 pay-go cash; (3) developer contributions; (4) transfer tax; and (5) utility funds and (6) grants. (Ulman, 2010, p. 50) The money that is borrowed or the 'bonds' are repaid "through the o9perating budget debt service payments much like homeowner makes mortgage payments." (Ulman, 2010, p. 50) Howard County has budgeted debt service payments of $84, 279,606 in the general fund. (Ulman, 2010, p. 50) The capital program for Howard County is a plan that lists the anticipated capital projects in the five years following the capital budget. (Ulman, 2010) The following table lists the programs under the 2011 five-year capital improvement program of Howard County, Maryland.
Council Approved 2011 5-Year Capital Improvement Program Summary (In Thousands of $)
Source: Ulman (2010)
The capital budget program statement of source by funds is shown in the following table.
Howard County, Maryland Council Approved 2011 Capital Budget by Source of Funds
Source: (Ulman, 2010)
VI. Howard County Funds
Howard County operates four different funds which include those of: (1) the general fund; (2) government funds; (3) proprietary funds; and (4) funds from other agencies. (Ulman, 2010) Government funds include: (1) self-sustaining recreation; (2) community renewal; (3) fire and rescue tax metro; (4) agricultural land preservation; (5) grants; (6) fire and rescue tax rural; (7) department of health; (8) environmental services; (9) share septic systems; (10) forest conservation; and (11) commercial paper bond. (Ulman, 2010) Proprietary funds include those of: (1) recreation special facilities; (2) W&S operating; and (3) W&S Special Benefits Charges. (Ulman, 2010) Howard County determines reasonable debt levels through the County Executive appointing a Spending Affordability Committee comprised by individual citizens with fiscal expertise in coordination with county officials in reviewing the ability of the county to absorb and pay for bond debt. The committee examines the following measures: (1) Debt measured as a percent of the county's assessable base. The County Charter limits the county debt to 12% of the assessable base, which has been adjusted to 4.8% based on 100% assessment levels; (2) Per capita debt measured as a percent of the jurisdictions per capita personal income.
(3) Debt measured against the population on a per capita basis; and (4) Debt Service (the repayment of bond principal and interest) as a percent of current general fund revenues. (Ulman, 2010, p. 52) Ulman (2010) reports that the capital budget of Howard County reflects the county's "priorities and commitment to investing" in the future of Howard County. Challenging economic times are noted however, the budget is stated to provide for the County's critical infrastructure needs and is of the nature that "helps position Howard County to come out of this recession stronger than ever…" (Ulman, 2010, p. 51) The Capital Budget plan adheres to the guidance offered by the Spending Affordability Committee through planning for essential infrastructure investments while limiting new General Obligation Bond debt to less than $100 million. (Ulman, 2010, p. 51) Howard County having experienced a severe winter notes that there is needed repair of roads, sidewalks, and curbs and gutters and has therefore included $3.26 million in the budget toward these3 repairs. Ulman states in the budget report that there is a great challenge in the balancing of the county's infrastructure needs to the limited resources of the county. The General Fund balance is stated at $81,929,879.00.
Government funds include the following with the accompanying balances:
Capital Project Funds $55,156,881.00
Special Revenue Funds $105,866,631.00
Proprietary Funds (Internal Service Funds) $2,843,971.00
(Enterprise Funds) $769,011,564.00
The documents reviewed reveal that Howard County lacks the revenue to complete…