Need back in 16 hours from now

Los Angeles and New York budgetary comparison

Vibert Jacob

South University

Los Angeles and New York budgetary comparison

The cities for comparison in this assignment are the city of New York and the city of Los Angeles. These two are major cities in the United States that have large population and play a crucial role both locally and internationally. The cities have major infrastructural, social, and economic burdens to bear. They also have huge finances to budget for the management of their cities. In the financial year 2017, the city of New York budgeted for an expenditure of $84 billion (The City of New York, 2017). Los Angeles has a budget of $9.2 billion (City of Los Angeles, 2017). The New York City budget is larger than some of the states in the USA. Both cities are required to ensure they have a balanced budget each year with clear information about the sources of the funds, use of the fund and ensure that the budgetary deficits are clearly financed in each year.

The city of Los Angeles budgets is prepared with several underlying principles that must adhered. The city has a reserve fund, which equals to 5% of the city’s general fund revenues. The capital improvements fund for the city is equal to 1% of the city’s general fund revenue. The city holds that all the funds from one-time sources must be used to finance the one-time expenditures. The city of New York has also established several reserves to take care of uncertainties in the city (City of Los Angeles, 2017). These reserves include the Retiree health benefit trust funds, a general reserve as well as a capital stabilization reserve fund for the city.

Sources of funds

The two cities have almost similar sources of funds for their budgets. These sources of funds, however, have differing contributions to the city’s finances. The table below presents the proportional sources of incomes to the cities.

	Los Angeles	New York
Source	%	%
property taxes	21.9	29
allocation from other government agencies	6.5	27
utility user tax	7.1	7
business occupation	8.6	4
licenses and other fees	24.5	8
sales tax	5.7	8
proprietary	5.3	13
miscellaneous	20.4	4
	100	100

In the two cities, the property taxes account for the largest source of incomes. In New York, the allocation and distribution from other government and government agencies is the second largest source of income. This is due to the international nature of the city, which hosts major national and international offices. The city of Los Angeles has large commercial enterprises within its jurisdiction that contributed large amount of incomes in form of licenses, fees, and permits compared to New York’s city income from license and fees amounting to only 8% of the overall incomes. The miscellaneous sources of finance include the transfers from the reserve transfers, the special funds available balances and other sources of funds that do not fall in any of the official categories.

The expenditure of the city finances is an indicator of the priorities for each of the city. Both New York and Los Angeles have differing needs and different populations to serve. They also have different infrastructure and challenges to address.

	New York	L A
Education	28	2.5
social services	18	25
police, correction and fire	10	42
Transport	3	12.1
health and environment	6	5
recreation and culture	1	3.5
pensions and fringe	18	2.4
Debt	7
general government	9	7.5
	100	100

The two cities have major expenditure in provision of safety and emergency services within their areas of jurisdiction. However, Los Angeles has placed more emphasis on the safety and emergency services as it spent at least 42% of its annual budget to this area of expenditure. The safety and policing services in the city include controlling the crime in the city through employment and deployment of police officers, equipment and other support needed by the police (City of Los Angeles, 2017). It also includes the control of fire by employing fire fighters and fire engines within the city as well as the provision of public assistance services in various areas. New York City spends 10% of its budget on this vote head.

In contrast, New York City spends more on the provision of education within its area unlike the 2.5% expenditure by Los Angeles on the same. New York City has a large number of basic education institutions within its area than Los Angele and therefore has to allocate more in this area. Additionally, the city commits its revenues to the expansions of the education facilities owing to the large population who are dependent on public education system, which includes the public school, bus transport in almost all the schools. The social services account for the second highest area of expenditure in both cities with New York having a lower expenditure than Los Angeles. The LA social services are broader than the New York’s as they cover the cleanup of the cities, parks, sewerage system and the provision of a solid waste management as well as children and societal welfare.

The transportation services in both cities require an elaborate planning process. The transportation system at New York is well developed and financed which makes the city send lower on this area. However, Los Angeles spends more on the transportation with the majority, 6.5% of its expenditures being used for the streets and highways and a considerable high amount, 2.5% going toward traffic control. The city has also placed major emphasis on the culture and recreational services to promote the use of arts and the recreational services for the large LA population. Government

The charts above show that New York has placed major emphasis on Education, pensions and fringe benefits, social services as well as police, fire and correctional services. These areas of expenditure accounts for the largest portion of the two cities budget. On the contrast, the city of Los Angeles has the highest priority on the police, corrections, and fire services followed by social services and transportation.

The 2017 budgets therefore show a contrasting area of priority for the two cities. While New York has its focus on financing education, the city of Los Angeles has its focus on the crime prevention and general aim of securing the city. Given the commercial interests of the LA city, there is need for the city to spend more of its incomes to finance the crime prevention and policing of the city as a way of protecting the commercial interests and entities. On the other hand, the New York seeks to empower its dwellers through education and provision of social services to the citizens. It also seeks to service its debts from the revenues it generates each year.

Budgets form a critical part of the governance structure in the world. They act as a tool for the governments, whether national, regional, municipalities as well as other private entities. The budgets are crucial in showing the areas where the organization or the government is maintaining its focus on (Djalil & Maulana, 2017). It also shows what areas that are of great importance by identifying the areas where the majority of the funds will be allocated to and therefore offer an important view on where the focus of the allocation of funds and the focus on the public fund’s expenditure.

Budgetary allocation and analysis of a government’s allocation of funds assists in the improvement of the government’s transparency, accountability, and openness to its citizens. It allows the citizens, from whom the entity well collect funds and provide the services to, have an informed inclusion to the government decision making. It also acts as a tool for achieving inclusivity of these areas that have been left behind economically (Shim & Siegel, 2008). Additionally, budgeting in the government sectors provides an avenue to direct investments to the areas where the government entity is placing major priority. However, there is need for an in-depth analysis of the impact of the government agencies budgetary allocation and the implementation process of such budgets to determine their efficiency and effectiveness in achieving their set objectives (Ives, Razek, Hosch, & Johnson, 2011). The criteria of making budgetary allocation as well as the choice of sourcing funds and its allocation need be clearly analyzed and understood as they have an impact on the type of the budget adopted, the budgetary allocation, as well as the expenditure of the allocated funds.

References

City of Los Angeles. (2017). Budget Summary FY 2017-18. Retrieved from http://cao.lacity.org/budget/summary/2017-18BudgetSummaryBooklet.pdf

Djalil, J. M., & Maulana, R. (2017). Influence of the Implementation of the Performance-Based Budgeting on the Performance Accountability of the Regional Government Institutions. Research Journal of Finance and Accounting, 8(6), 25-33.

Ives, M., Razek, J. R., Hosch, G. A., & Johnson, L. A. (2011). Introduction to Government and Non-for-Profit Accounting. Pearson Custom Publishing.

Shim, J. K., & Siegel, J. G. (2008). Budgeting Basics and Beyond. Maison: John Wiley & Sons.

The City of New York. (2017). Executive Budget Fiscal Year 2017. Retrieved from https://www1.nyc.gov/assets/omb/downloads/pdf/erc4-16.pdf