Government Overview Final Project

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Budget Influences

City of Atlanta

Professor P. May

AJS/574

Grace Acevedo, Diana Kline, Cori Purnell

August 3, 2020

Introduction

The public budget indicates a forecast of the revenue that the State will receive and a limit on the expenditure it intends to make. The revenue provided in the budget will come from taxes, fees, and other resources set by tax law, while expenditures will be made on investments and services for the benefit of the community.

This paper intends to describe the political and economic influences in the public budget, as of the social, and cultural influences, in the City of Atlanta. In addition, it will portray the elements involved in the budget preparation, enactment, and execution.

Political Influences in the Atlanta Public Budget

Public budget includes three phases: development and preparation, implementation and execution, audit and review. In addition, four main bodies are involved theorizing and finalizing the budget.

In the City of Atlanta, there are four main bodies involved in conceptualizing and finalizing the budget.

· The Mayor is responsible for preparing and submitting a proposed annual budget ordinance to the governing body and takes into consideration the  ruling presented by the Finance/Executive Committee of the City’s Council.

· The City Council may conduct more than one public hearing on the propose budget. It can also modify the proposed budget countless times until the final version allocates all legitimate and charter-mandated expenditures.

· The Budget Commission collaborates with the City Council in submitting a predicted revenue report to be used in the preparation of the budget performed by the Mayor which are binding and needs no approval or disapproval.

· The Chief Financial Officer delivers a comprehensive copy of the final version of the budget before submitting the final budget to the City Council.

· The City Council implements overall, special revenue and debt service fund budgets with the level of legal budgetary control that the office level establishes. City Council approves appropriations for capital projects on an individual basis, at the project’s original approval.

Economic Influences in the Public Budget

Economic disparity and inequality are an imminent threat to an economy. The government can address these kinds of threats by introducing public and economic welfare policies for the underprivileged sections of the society through the budget.

As the budget is an instrument of the government to improve the economy, it is necessary to describe the main economic problems that need to be addressed: macroeconomic imbalances and economic fluctuations, that is, the economic cycle of the main macroeconomic variable that is GDP (gross domestic product), the breadth of which should be moderated with the help of fiscal policy. Precisely, fiscal policy in the short and medium term must be aimed at stabilizing the economy, that is, to smooth economic cycles and reduce imbalances.

Economic growth is one of the main concerns of governments and has therefore been extensively analyzed in all its aspects by different authors. According to Adam Smith, the theory of economic growth is based on three fundamental elements: division of labor, capital accumulation, and international trade (Adam Smith: The Inspirer of Modern Growth Theories).

Social and Cultural influences in the Public Budget

The City Council holds public hearings throughout the budget process. These meeting are advertised in the newspaper at least seven days before the hearing. During the hearing, the public is welcomed to propose items for the budget as well as provide feedback and ask questions about proposed monies scheduled for specific items such as the General Fund. (Virtual/Interactive Public Hearing. Atlanta City Council, GA, 2020).

Edwards (2009) said that there is a very real and powerful role that presidents have in setting an agenda for the nation, which in turn influences the fiscal, economic, and social path of the country. He describes presidential leadership in terms of the chief executive as director or facilitator. These kinds of roles are discussed by others in a budgetary context and relate to theoretical perspectives about the budget and policy process. (BibliU - Reader, n.d.)

The City of Atlanta also provides cultural services that require funding from the General Fund. Their mission is to create and promote rich and diverse cultural experiences in the city of Atlanta that enhance quality of life and expand the city’s international reputation while preserving and protecting Atlanta’s cultural heritage. Some of the cultural experiences that are offered are through museums, performance, and art centers, as well as art galleries and festivals. (Mayor’s Office of Cultural Affairs | Atlanta, GA, n.d.).

Elements involved in the Budget Preparation, Enactment, and Execution

Budgeting is the process through which the government allocates prioritized needs for a company and projects. The budget is essential for the legal basis of spending and to be accountable for how the money was spent. Budgeting is vital for easy revenue measures that help in fiscal policy for most organizations to achieve their target. Therefore, a budget has to be influenced by various elements that help in budget preparation, enactment, and execution.

​ Budget preparation in Atlanta's city happens every year to determine how funds are spent and the allocation of resources in the city. This is the first stage establishing the budget policies and regulations that will help guide budget preparation. A budget calendar and document should be set to allow easy identification of programs to be carried and the finances required to support the activities. Hence the measures will help in efficiency and effectiveness. After budget preparation, the budget has to be taken by the minister of finance to the legislature to be approved (Ibrahim, 2019). The enactment process is crucial because it will set parameters on how revenues will be generated and resource distribution.

​ Budget execution is the last process of budgeting; therefore, three principals have to be achieved for it to prosper. The principles are the proper purpose of the expenditure. The obligated appropriations must occur within time limits, and the obligations set by the congress have to be established within amounts set (Kelly, 2015). This will help in recording the budget for the fiscal year of the specified appropriations. Also, the allocation process will help divide the budget according to expenditure activity, programs, and functions. Executive of the budget will help in the allotment system in which time elements are allocated monthly or quarterly. The allocation process is essential because it will ensure funds are available when needed and serve its purpose.

The allocation of public expenditure are key elements of a financial policy, having a decisive impact on the growth of the economy and on social development, which are long-range impacts. The public budget stimulates the accumulation of physical capital and the investment in human capital, this influenced by politics, economics, society, and culture.

 

References

Adam Smith: The Inspirer of Modern Growth Theories https://www.sciencedirect.com/science/article/pii/S1877042815037374/pdf?md5=3081cda2339746b373ba42e20d7fe954&pid=1-s2.0-S1877042815037374-main.pdf

BibliU - Reader. (n.d.). Bibliu.Com. https://bibliu.com/app/#/view/books/9781118913109/epub/OPS/xhtml/Chapter06.html#page_0

Budget & Fiscal Policy | Atlanta, GA

https://www.atlantaga.gov/government/departments/finance/budget-fiscal-policy

Budget Policy and Analysis of Major Budget programs http://portal.uned.es/portal/page?_pageid=93,56233773&_dad=portal&_schema=PORTAL&idAsignatura=26618211

Citycouncil.atlantaga.gov. 2020. Virtual/Interactive Public Hearing | Atlanta City Council, GA. [online] Available at: <https://citycouncil.atlantaga.gov/standing-committees/finance-executive-committee/fy-2021-proposed-budget/virtual-interactive-public-hearing> [Accessed 2 August 2020].

References

Ibrahim, M. M. (2019). Designing zero-based budgeting for public organizations. Problems and Perspectives in Management, 17(2).

Kelly, J. M. (2015). Performance budgeting for state and local government. Me sharpe.

Mayor’s Office of Cultural Affairs | Atlanta, GA. (n.d.). Www.Atlantaga.Gov. Retrieved August 2, 2020, from https://www.atlantaga.gov/government/mayor-s-office/executive-offices/office-of-cultural-affairs