Finale2

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New Mexico State University *

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POLS-315

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Political Science

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Apr 3, 2024

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Final Exam POLS 541 Public Budgeting This is an open book take home examination. You may use your notes and textbook, but not each other. While you may use your books and notes for inspiration, please refrain from quoting directly from the material and put your answer in your own words. Please enter your answers directly to this Word document and upload a separate excel sheet for part IV to the Canvas drop-box titled “Final Exam.” There are a total of 100 points possible. Good luck! Part I . Budgetary Process and Reform (50 points) In essay form, identify and explain the primary steps or stages of the budgetary process (or budget cycle) at the federal level. Be sure to describe what occurs at each stage, when it occurs, what actors are typically involved including offices, committees, and their roles and responsibilities. Finally, discuss the major developments in the history of budgetary reform at the federal level concerning the creation of the executive budgetary process, the creation of key budgetary players such as OMB and the CBO, limits on executive power, and key developments to rein in spending and address deficits. What drove these developments and what impact were they expected to have? Please be very specific in your response. The budgetary process at the federal level in the United States is a complex and multifaceted procedure that involves several key steps and various actors. This process can be broadly divided into several stages: The President's Budget Request : This is the initial stage of the budget cycle, typically occurring in the first week of February. The President, through the Office of Management and Budget (OMB), submits a detailed budget request to Congress. The OMB plays a critical role in preparing this budget, which outlines the President's fiscal policy and spending priorities for the upcoming fiscal year. Congressional Action : After receiving the President's budget, Congress, particularly the House and Senate Budget Committees, begins its work. These committees are responsible for creating a budget resolution, which sets the broad framework for government spending, revenue levels, and the federal deficit. This stage usually takes place between February and April. The budget resolution is not a binding document but serves as a blueprint for subsequent budget-related legislation. Appropriations and Authorization Process : Following the adoption of the budget resolution, the appropriations committees in both the House and Senate work on twelve annual appropriations bills, which allocate funding to various government agencies and programs. This stage, typically occurring from spring to September 30th, involves detailed scrutiny of the President's budget request, adjustments based on policy priorities, and eventual passage of these bills. The authorization process, parallel to appropriations, involves committees other than the appropriations committees 1

and focuses on establishing or continuing the legal operation of federal programs. Budget Execution and Review : Once appropriations bills are passed and signed into law, federal agencies begin the execution phase, implementing their programs according to the allocated budget. Throughout the fiscal year, the OMB and Treasury Department monitor spending to ensure compliance with the budget. This stage also involves adjustments and re-allocations as necessary.Historically, the federal budgetary process has undergone significant reforms: Creation of the Executive Budgetary Process : Before 1921, federal agencies submitted their budget requests directly to Congress. The Budget and Accounting Act of 1921 established the executive budgetary process, mandating the President to submit a consolidated budget to Congress, enhancing coordination and control over federal expenditures. Establishment of Key Budgetary Players : The OMB, originally the Bureau of the Budget, was established by the 1921 Act to assist the President in preparing the budget. The Congressional Budget Office (CBO) was created in 1974 to provide Congress with independent analyses of budgetary and economic issues, counterbalancing the OMB and enhancing Congressional oversight. Limits on Executive Power : Over the years, Congress has sought to reclaim some of its budgetary authority, notably through the Congressional Budget and Impoundment Control Act of 1974, which established the modern budgetary process and restricted the President's ability to impound funds. Efforts to Rein in Spending and Address Deficits : Various laws, such as the Gramm-Rudman-Hollings Act of 1985 and the Budget Enforcement Act of 1990, were enacted to control budget deficits. These laws introduced mechanisms like automatic spending cuts (sequestration) to enforce fiscal discipline. These developments were driven by the need for greater fiscal responsibility, transparency, and control over federal spending. They were expected to lead to more efficient government spending, reduced deficits, and a more balanced approach to fiscal policy. However, the effectiveness of these measures has been a subject of debate, influenced by political, economic, and social factors. Part II. Budget Format and Analysis - use Table 1 and Table 2 below to answer each question (12 points) a. What major type of budget (format) is reflected in Table 1 below? (2 points) The major type of budget reflected in Table 1 is a line-item budget. This is indicated by the budget being presented with each activity or program listed separately alongside its corresponding expenses for past, current, and budget years. b. What types of measures are found in Table 2? (2 points) 2

In Table 2, the types of measures found are cost efficiency metrics. These measures indicate the cost of providing a service per unit of measure (e.g., per acre, per player, per person, per round, per child, per court hour, per user hour) for the current year and the budget year c. Considering the information found in both Tables, which activities would you encourage your boss, the budget director, to look more closely at during next week’s budget hearing with Parks and Recreation? Why? (8 points) Based on the information provided, areas I would recommend the budget director look more closely at during the budget hearing with Parks and Recreation include: Golf Course Subsidy: This activity shows the largest percentage increase in spending (25%) and the highest cost per unit (round of golf). Further analysis is needed to assess the rationale for this increased funding and its impact on the budget. Summer Youth Program: This activity shows a significant decrease in spending (8%) despite a slight decrease in cost per child. Questions should be raised about the reasons for this spending reduction and its potential impact on program participants. Tennis Court Management: This activity shows a significant increase in cost per court hour (18%). Reasons for this increase and potential cost-saving measures should be explored. These activities have been chosen because they show significant changes in budget requests and costs per unit measures, indicating potential shifts in policy, unexpected cost increases, or changes in program management that should be discussed to ensure fiscal responsibility and the effective use of public funds. Table 1 Department of Parks and Recreation Budget Request for 20XX Activity Past Year Current Year Budget Year 1 Playground Maintenance $31,600 $33,500 $36,200 2 Adult Softball 10,000 10,000 10,000 3

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