Government Overview, Budget influences

FINANCIAL CONTINGENCY PLANNING 2

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Financial Contingency Planning: Texas Police Department

In Austin, Texas, the police department suffered budget cuts after the Municipal Council voted in favor of the cut. The budget cut left the department in a financial dilemma requiring the department to find other revenue sources to supplement its budget. Inadequate federal funds for Texas's police department to meet its budget require the department to seek partnerships that may provide it with revenue. Public-private partnerships are agreements between the government and the private sector to provide quality services to the people (Verweij, Teisman, & Gerrits, 2017). Texas's police department can implement public-private partnerships as a financial contingency plan to mitigate its budget deficit. By establishing a connection with private security in the city, the police department will not have to stretch its limited budget to areas left for the private sector. By conducting extensive research in the law enforcement industry, the department will identify private security players to partner with, ensuring law and order prevails in the city despite the budget cuts.

Community-based organizations (nonprofit)

The police department in the city can also solicit funds from nonprofit organizations. The United States Deputy Sheriffs Association is one nonprofit organization that the police department can approach for financial support towards its budget. This organization collects money from the public, and it can therefore give it back to the community as a form of a grant to support the maintenance of law and order despite the budget cuts. TMPA is another nonprofit organization that can be approached by the police department for financial support. TMPA is a tax-exempted organization developed to help community members and contribute all of its collections back to the community through various programs.

Bond issuance

Bonds also act as a source of revenue for the police department. There are two types of bonds that the police department can apply. They are all issued by both the federal, state, and local governments. Municipal bonds and treasury securities are the two types of bonds that the department can quickly secure. The USA government issues Treasury securities, and these are the most valuable securities available. The department can comfortably pay for this type of securities because they can take up to 30 years to mature. The treasury securities do not attract state or local tax. On the other hand, the state and local governments offer municipal bonds for various projects within the community that does not necessarily lead to profit. The municipal bonds are exempted from federal tax and, in some instances, from the state and local government taxes. Municipal bonds are the best type of bonds that the Texas police department can apply for, although it can also apply for the treasury securities.

Grants

There are several options available when it comes to grants as a source of revenue for Texas's police department. Grants are non-refundable funds that are offered, especially to a government agency. Community Policing Development Grant Program, Federal Government Grant Program, United States Department of Justice Grant, Local Law Enforcement Block Grant Program, and Urban Areas Security Initiative Grant Program; these are some of the programs that the police department can apply for loans from. All these grant programs have been designed to help police departments all over the United States to effectively and efficiently serve the community in various capacities (Chernick, 2020). Applying for grants from these programs, the police department in Austin, Texas, may supplement its budget deficit. Grants are non-refundable, and this will be ideal for the police department.

Multi-level government financing

The Texas police department exists in a country with three government, federal, state, and local governments. This allows the department to source funds from all these government levels, hence multi-level government financing (Salm, 2018). The department can apply for financial support from the federal government, the state government, and the local government. By combining the funds from these three levels, the Texas police department may carry out its operations despite the budget cuts. Although these three levels are engaged in defunding the department, there are other means to solicit money from them.

Effects of Taxation

Considering the various revenue sources for the Texas police department discussed above, most of them are not subject to tax. Under bonds, the department can apply for treasury securities and municipal bonds. The treasury securities are not subject to either state or local taxes. On the other hand, municipal bonds are exempted from federal taxes, and in some situations, they are also exempted from the state and local government taxes. When it comes to government grants, these are fully exempted from any form of taxation. The other three sources of revenue for the police department that have been discussed in this paper are subject to taxation.

Financial Efficiency

Financial efficiency refers to satisfying all the requirements to facilitate high-quality financial services at a minimal cost. Since the police department will be seeking funding from other parties to carry out its operations, the sources of this revenue would prefer a guarantee that the money or support they will be extending to the department will be efficiently used and for the provided objectives. The state and local levels may evaluate how the department has used its financial resources before the budget cuts. Once these levels, state and local, determine that the money was effectively used, they can approve funding towards the department. Financial efficiency acts as a measure of how the department can effectively use the funds offered to it.

Sources of Funds for the Project

Identifying the sources of funds stops being a challenge when an organization identifies why they need to source for funds. There are so many sources of funds, but each source is for a specific purpose or jurisdiction. Therefore, an organization must consider jurisdiction as a factor when looking for funds sources. For example, in the Texas police department, the department must seek sources offered by the federal government, the state government of Texas, and Texas's local government because the police department falls within these jurisdictions. The primary factor that determines the sources of funds for a project is the type of project that the money will be invested.

Conclusion

To conclude, although the Texas police department had received budget cuts, it still has the hopes of meeting its budget requirements thanks to the various sources of revenue we have discussed in this paper, including Public-private partners, community-based organizations (nonprofit organizations), bond issuance, grants, and multi-level government financing. We can also conclude that bond issuance and grants are the best revenue sources because they are not affected by the tax. Additionally, financial efficiency plays a crucial role when it comes to seeking financial support. If the police department effectively seeks revenue from the discussed sources, it will supplement its budget deficit.

References

Chernick, H. A. (2020). The United States grant system. In Intergovernmental Transfers in Federations. Edward Elgar Publishing.

Salm, M. (2018). Comparative financing of megacities in multi-level BRICS states. International Journal of Public Sector Management.

Verweij, S., Teisman, G. R., & Gerrits, L. M. (2017). Implementing public-private partnerships: How management responses to events produce (un) satisfactory outcomes. Public works management & policy, 22(2), 119-139.

What is the ideal mix of federal, state, and local government investment in infrastructure?. (2020). Retrieved 5 November 2020, from https://www.epi.org/publication/what-is-the-ideal-mix-of-federal-state-and-local-government-investment-in-infrastructure/