Budget Compare and Contrast

¶ … budgets of any major size will get most, but not necessarily all, of their money from taxpayers of several many sorts but the main goal of the agencies regardless of size and structure is to provide basic and needed services to the area they serve, whatever and wherever that may be.

While all budgets are quite similar in one form or another, they are all different in their own ways and this can include the aim(s) of the money to be spent, where the money will come from and the overall fiscal policy exercised within the budget including investment, tax rates and savings strategies.

Basic Description of each budget

Differences and similarities of each budget

Sources of Revenues of each budget

Change of revenue accounts in the future

e. Budget's fit with mission of the domain

f. How to improve budget and/or revenue estimation for each budget

Conclusion

Budget Comparison

The author of this report is to compare and contrast two different budgets of great size and complexity. One of those budgets is to be at the local, state or agency level while the other is to be a major part of the United States government. The two agencies selected were the City of Los Angeles and the Department of Health and Human Services. The most recent projected or adopted budget for both jurisdictions shall be used. For the Department of Health and Human Services (HHS), that would be the fiscal year 2015 budget. For the city of Los Angeles, that would be the fiscal year 2013-2014 budget. While all budgets are quite similar in one form or another, they are all different in their own ways and this can include the aim(s) of the money to be spent, where the money will come from and the overall fiscal policy exercised within the budget including investment, tax rates and savings strategies.

Analysis

The Los Angeles budget was submitted by Los Angeles Mayor Antonio Villaraigosa and was later modified and adopted by the Los Angeles City Council. It was to have covered all revenue collection and spending from July 1st, 2013 thru June 30th, 2014. As such, the relevant period is literally about to end with days of this report being prepared. The budget is an amalgamation of all of the different agencies and what each of them will spend for the fiscal year in question. For each agency, there is a column that shows the mayor's proposal of spending as compared to the council changes. If/when there are changes done in counter by the mayor, then those are shown and then a final column that shows the final total is shown on the far right. For example, page R-10, fairly early in the report, shows the spending amounts for Animal Services. The salaries and expenses proposed by the mayor and changed by the council are shown and the general source of the funds to be used are shown at the bottom. In the case of Animal Services, a modicum of the funs shall come from the Animal Sterilization Fund but he vast majority will come from the general tax collection fund that is used by the city of Los Angeles to fund most of their endeavors. This breakdown continues for each agency using all of the sections just mentioned. The prevailing format changes for special funds and/or projects that involve investments or other special fund sources like pension funds and so forth. However, the format is pretty consistent. There are also pages that show tax receipts vs. budget and how this all compares to the new year's budget so that one can see the trend over the last two to three fiscal years including what has happened and what has been enacted for future projects and expenses. In total, the budget for the City of Los Angeles was 415 pages for the fiscal year in question and this includes the index (Los Angeles, 2014).

In terms of where the Los Angeles money goes, that is neatly broken down within the report. About 44.4% of all funds go to community safety expenditures such as crime control, fire control, public assistance and other similar endeavors and expenditures. Another 26.8% goes to home and community environment spending such as sewage collection/treatment/disposal, solid waste collection and disposal, planning/building enforcement, blight identification/elimination, aesthetic and clean street programs, and other similar spending. Transportation comes in at 12.5% of all spending with just half of that figure going to traffic control and the rest goes to street/highway transportation and other measures/requirements. About 2.4% of the total budget goes to the Los Angeles human resources spending amount as well as economic assistance/development expenditures. The final 7.4% goes to general administration and support. Those amounts include administrative, legal and personnel services, legislative services, executive services, public buildings/facilities expenses and other financial operations (Los Angeles, 2014).

By comparison, the fiscal year 2015 budget for the Department of Health and Human Services (HHS) was reviewed and pored over for this report using the "Budget in Brief" snippet that they send as a summary or their full budget due to the gargantuan size of the latter. The Budget in Brief starts out by covering the overall total of outlays for the new budget year and it shows the prior two fiscal years, those being 2013 and 2014 of course, as a means of comparison. In 2013, the budget showed spending of $886 million on a budget authority of $873 million. In 2014, there was an authority of $962 million and out outlay of $958 billion. In 2015, the amounts are projected to be an authority of $1.020 billion and a total outlay amount of $1.010 billion. Of those one billion dollars, a shade over half of that will go to Medicare for a total of just over half a billion. A third of the overall number will go Medicaid. Anywhere from two percent to eight percent will go to discretionary programs, children's entitlement programs, Temporary Assistance for Needy Families (TANF) and other mandatory programs. The sources of these funds come from two major sources, those being the "general fund" of federal income tax receipts while a lot of other money comes from money withheld directly for the program in the form of Medicare tax, an employment tax that anyone with taxable income pays into. The recently passed, Patient Protection and Affordable Care Act (PPACA), commonly referred to as "ObamaCare," is a program not specifically mentioned in the pie chart but is also a concern and a factor in the budget since its enactment in 2010 (HHS, 2014)

The breakout for each "sub-agency" of the Department of Health and Human Services is laid forth. For example, the Centers for Disease Control, the Food and Drug Administration and the National Institutes for Health, among others, are all actually sub-agencies to the larger Health and Human Services Agency. This is not unlike many to most intelligence agencies at the federal level all answering to the Director of National Intelligence (DNI) and/or the Homeland Security director. With each agency, there is a good further drilling down of what is done as well as graphs and charts showing things like enrollment figures, highlights of challenges or problems in certain areas and so on. The total "Budget in Brief" document assessed for this report is about 141 pages (HHS, 2014).

As for a compare and contrast of the two budget documents, there are a lot of similarities but there are also a bunch of differences. They are similar in that they are both quite lengthy but they are different in that the supposedly smaller agency, at least in terms of any larger government force, has a budget document that is more than 400 pages but the HHS "brief" document is 141 pages. Even with the enhanced brevity of the HHS document, there is a greatly improved amount of detail, explanations and so on in addition to the standard prior year and current year examples that dominate the Los Angeles budget. The HHS budget not only names each sub-agency and expenditure in the budget line items themselves and compares the current year stop the prior years, they also give fairly thorough explanations of what each department or sub-agency does, how many people they have serviced in recent years and how that stands to change in the coming years and other things as well. Both of the budgets have indexes and a legend of what each acronym stands for. The Los Angeles budget, meaning the actual document reviewed for this assignment, is full of actual statues and other "legalese" whereas it is obvious that the HHS budget document was condensed and reformed for easier public consumption. However, neither of the budgets are written or presented in a form that an educated person could not understand but the Los Angeles version is more likely to confuse people that are new to politics, business or finance in general as compared to the HHS budget (HHS, 2014).

Regarding the major sources of revenue in each budget, this is actually something the Los Angeles budget does quite well and effectively near the end of their document. Indeed, they use a dollar bill-laden chart as a model for showing what money is going where, what money is coming from where and so forth. These are the same pages that the spending amounts listed earlier for Los Angeles came from. In terms of where the money comes for Los Angeles, not quite a fourth, 23 cents of every dollar, comes from property taxes. About 7.4 cents of every dollar comes from other governmental agencies and 8.3 cents of every dollar comes from utility user taxes. About 8.4 cents of every dollar comes from business and transient occupancy taxes and nearly ten cents (9.8) of every dollar comes from licenses, permits and fees except for proprietary transfers. About 14.2 cents of every dollar comes from parking fines, documentary taxes and other sources along those lines. About 4.6 cents of every dollar comes from sales tax while about 5.9 cents of every dollar comes from proprietary departments such as from water and power transfers, airport and harbor retirement transfers and airport/harbor transfers. 9.1 cents of every dollar comes from sewer revenue as billed to each user and the final 9.3 cents of every dollar comes from miscellaneous expenses such as budget stabilization fund transfers, special fund available balances and other assorted similar monies (Los Angeles, 2014).

So far as Los Angeles and their sources of revenue, not a lot is going to change. The amount of revenue will almost certainly keep rising at the same overall clip as the population in the area and those two will indeed feed off each other. However, one notable change that is upcoming came to light about two months ago is that Los Angeles would be sharply increasing the amount of parking fine collectors and ticket-issuers that would be working. Mayor Eric Garcetti (who replaced the aforementioned Mayor Villaraigoza in the last elections) noted that while the bad parking jobs of residents was not something that should be reacted to by trying to increase revenue, he did state that the amount of meter maids would be increased but that the fine structure would not change at this time. Because of the increase staffing, the revenue is surely going to go up based on projections (Smith, 2014). As noted before, the Department of Health and Human Services gets its funds from the general tax fund at the federal level that funded in large part from the federal income tax but there is also the separate and specific Medicare withholding tax that is withheld on all taxable wages of all employees and a matching portion if also paid the employer paying the wages. Self-employed individuals pay both portions (IRS, 2014).

The next item up for discussion is the alignment between each of the two budgets in question and how they do or do not line up with the mission of each of the relevant agencies. In the case of Los Angeles, the linkage between the fund and what those funds should be spent on is fairly easy to discern and define. Of course, all of the public works in the area including police, fire, street construction/maintenance, and so forth would and should be paid for by the tax receipts garnered from residents and visitors to the city. Not only would the residents help in maintaining their own town, people that visit the area and pay for parking, hotels and sales tax (among other things) would help fund the government. This is as it should be as they are making use of the businesses and services in the area and they thus bear a burden to pay their share of the services used. However, local residents would pay more and this is also commensurate with what a budget should do as they would make heavier use of services in the area and they would also get more benefits.

When it comes to the Department of Health and Human Services, the correlation between money collected, money spent and the intended mission and purpose behind those funds, the answers are a little more nebulous and ambiguous. The federal tax structure and government system has expanded in leaps and bounds the federal government is far and away the most pertinent example of this in motion. This has led to an ongoing and continuous debate what the government (HHS in this case) is doing right, what they are doing wrong, what they should be doing for people, what they should not be doing for people and how they go about completing any or all of the above. That being said, the budget (for when it is actually passed and that has not been all that smooth as of late) was requested by the President and was later passed, at least in a Band-Aid fashion, by the Congress.

As far as how the budget can be improved in either or both cases, there are a number of things that can and should be done. For both budgets, there clearly needs to be a focus on return on investment. This does not mean that the citizens of the respective jurisdictions should be treated like line items on a budget and that is it. However, to just throw good money after bad when it is clearly not doing much good at the end of the day rather than patching up a problem that does not go anywhere is not a solution either, at least not the best one. Instead, there needs to be a focus on results-based budgeting and leadership whereby money is allocated in a way that prevents people falling through the cracks as much as is reasonably possible while not at the same time just writing a check with no strings or conditions attached. For example, if someone is getting free or reduced cost insurance and/or they are getting TANF assistance or anything else along those lines and they are engaging in criminal behavior, not looking for work or not caring for their kids properly despite being supported by the local or federal governments, there need to be consequences for that person rather than just paying it no mind.

A huge way of eliminating dependency and repeat requests for aid would be education and teaching about how to avoid the trappings of poverty and debt in the form of not having children out of wedlock (or at least not without a committed relationship or at least a person willing to co-parent), finishing high school, going to career college or regular college using federal grants and so forth. This is the very same path used for reduction of obesity and the associated conditions that come with it such as heart problems, type II diabetes, and so on. It is literally the whole "give a man a fish, teach a man to fish" argument in gritty detail. Educating people on how to get out of or stay out of poverty is much easier before the worst happens. Meaning, reaching and teaching people before they drop out of high school and/or before they have children too earlier or when otherwise not intended is huge in stopping problems before they start or at least mitigating the. Roughly half of all births in the United States are out of wedlock. Even with the religious and moral arguments aside, that is a huge drain on both the City of Los Angeles and the Department of Health and Human Services budgets as many of those single parents need support due to being ill-prepared for a child and/or because the non-custodial parent is missing in action. In comparison, out of wedlock births are much higher than they were even fifty years ago. There has been some leveling off with that but there needs to be a lot more. Reducing that would mean less spending on things like welfare (e.g. TANF, etc.), Women with Infant Children (WIC), SCHIP (government-paid insurance for children), Medicaid and so forth. Retirement-oriented funds are largely contributed to by the recipients themselves and should not be held to this standard except in extreme cases.

An example of an extreme case in terms of pensions is when there is heavy use of unsustainable defined benefit (rather than defined contribution) plans that are literally going to swallow local or state budgets whole. While it is noble and proper to help secure the retirement years, guaranteeing returns on investments that are not funded by employee contributions and when the other sources of funding are dwindling or are being gobbled up by other expenditures is less than wise. There is much debate about how right or ethical it is to allow public employees to jockey for large pension and pay benefits that are not in line with their private sector counterparts, but regardless of the ethics on that it is a golden goose that was killed dead when it was done wrong by the United States automakers and the fact that all three of them still exist (even if one is no longer technically an American carmaker) is nothing less than a miracle. The same thing is happening with public agencies right now and taxing those pension programs into solvency is simply not going to work for a number of reasons.

Another issue that taxing jurisdictions of all sizes and shapes need to address would be the workforce size, composition and facets. The unemployment rate in the Uinted States is still fairly high but is far off of its peak at more than ten percent. However, the workforce participation rate and the overall proportion of how much the poorest of Americans make (when they work) versus that of the rich is becoming more and more out of balance. In addition, the most menial of jobs are always the last to come back after a recession like the one that lasted from 2007 to 2009. Indeed, most of the mid- to higher-level jobs that were lost during the Great Recession have come back but the lower-level jobs are still largely absent. On top of that, the lowering unemployment rate is not all that encouraging when one considers that the rate quoted is the "U-3" rate and that rate does not account for people that are under-employed (e.g. people that want to be full time but are stuck in a part time job), people that have given up and people that have exhausted unemployment benefits. Were those three groups to be included, the rate would be north of ten percent and perhaps as high as fifteen.

What this should mean to federal, state and local tax jurisdictions is that using taxpaying businesses and people as their personal piggy bank to address their wasteful spending that borders on criminality and negligence is the wrong move to make. The author of this report may be deemed to be a little over the top when using the word "criminal" when discussing this, but the word does make sense. Using HHS as an example, there was a recent audit complete whereby it was found that the agency was making some major miscues and that it was hurting the recipients and state governments that rely on the actions of their federal regulator. One such audit found that HHS was late on a $1.8 million payment that was due to cover federal reimbursement for multiple programs. Further drilling down found that some of the problems go back more than a decade. On top of that, roughly 661 participants were drawn into question as to whether they could or should even be eligible for the support they received (Stoddard, 2013). This is a sterling example of money being potentially (if not definitely) wasted on people that do not (or should not) need it. That is hard to police effectively at all times, to be sure, but it is not rocket science and it should be done. The overall mission of how the HHS, for example, crafts and enforces its mission as well as the motives behind the same can be looked at as well as there is certainly a political motivation behind how agencies are run and operated with all administrations. However, fixating on that is not necessary to save a ton of money.

Another facet of budgets that should be focused on, and that applies more to Los Angeles than it does to a health-related agency like HHS, would be crime. Many people decry the use of jailing and how prevalent it is in the United States. However, that being the case is probably born of lax enforcement and the people that are violent in jail are probably that way already. Short of segregating them and making sure they play nice, there is not a whole lot that could (or should) be done for felons that are institutionalized and/or have no interest in being model and productive citizens. Along those lines, the jails in Los Angeles and the wider state of California are literally a joke. While not in the LA area and while not a city jail (it's a state jail), San Quentin prison is a good example of what is terribly wrong with the local and state jail system in California. First, the jails that are there (like San Quentin) are draconian and ancient compared to what they need to be to ensure proper demarcation and separation of inmates as well as the safety of the guards and other personnel that work in the prison. Secondly, when drunk drivers and other fairly minor offenders are serving no time at all but should be serving at least something, this is a clear indication that there are not enough prisons in the area. The federal, state and local authorities need to work together and get a prison system in Los Angeles and the wider state that can house all of the people that need to be housed but in a way that focuses on rehabilitation where it is possible and simply warehousing people that are violent and/or are not participative in getting clean and off of drugs and alcohol.

The reason this is all important is that violent felons and drug users (including drunks) should never (ever) be roaming the streets as they clearly present a danger to themselves and/or to others. While money has to be spent to house them and punish them, a lot more money and things that cannot be quantified in dollars like peace of mind and human life are lost every day because the jail/prison/rehab frameworks in California and Los Angeles are simply not remotely adequate. A person that participates in gangs, that shoots up the streets and/or make streets unpassable for people that are just trying to live their lives needs to have their freedom taken from them. People state that undocumented immigrants are needed because citizens will not do the work. Instead, non-violent offenders can be made to do these jobs at a discount so that the business gets cheap labor and a prisoner not only has jobs and responsibilities but they can also make a semi-honest living and the prisons can use the proceeds to offset some of the costs of jailing the offenders when they go home at night. The tent cities of Maricopa County are not called for here, although it may not be the worst idea for some areas/offenders, but it is clear that the system in California needs to be expanded. Heavy use of probation and parole should be used for non-violent offenders that abide by the behavior and restitution standards they are asked to follow but people that would normally be jailed at least for a time should still be jailed and people that re drunk/high and that need rehabilitation should not be put in the same morass and pit as the violent offenders that make weapons of pens and fling their feces at guards.