Introduction
Kelsey does face new budgetary challenges. That the federal government has reduced the federal pass-through money at a time when crime in the state is increasing and there is need to revamp the state’s police force and infrastructure does not help. But most importantly, the conflict of interests on this matter might make it even harder to arrive at a conclusion that helps the state. This paper discusses the various elements of Kelsey’s budgeting process under the circumstances mentioned: ethical issues; changes to the budgeting cycle (preparation, execution and evaluation); new budgeting approach and it addresses the problem of crime; and cost-benefit analysis.
Ethical Issues
There are always ethical issues that arise when it comes to spending government funds. First of all, it is important to know who are the stakeholders associated with the design of the budget and what their interests are.
Citizens: These are the people who live in Kelsey City. As taxpayers, it is their right to receive good services, including security. Unfortunately, more and more citizens have been raising issues regarding security in the City, which has deteriorated over the past one year, a situation that has coincided with growing population in the city.
Budgeting Group: This is the team that prepares, executes and evaluates the budgeting cycle. The interest of this group is to have enough funds to grant all sectors their wishes. But this is never so and they have to work with what they have. Unfortunately, a lot of times they find themselves under lot of pressure from top personnel.
Mayor: The Mayor’s main interest is political; that he is voted again by the people. He, therefore, does not like what may stand in the way of that (such as higher taxes that may citizens are likely to blame on him).
The Chief of Police Association: With higher crime rate, the association is under pressure from the citizens. Now focusing on its own interest (including saving itself from blame for failing to perform their security objectives), the association is calling for a temporary extra 15 percent public safety tax to be spent security issues.
Other Parties: Such as the Sierra Club, which is calling for more police officers.
Besides these, there are many other potential stakeholders who could be directly or indirectly affected by the budget cycle or the consequences of the budgeting decisions.
Ultimately, though, there are likely to arise conflicts of interests. With increasingly limited funds, owing to reduced federal pass-through funds, conflicts are already arising. The police force is asking for increased taxes to fund its tasks. This does not go well with the state legislature and local governments, including the mayor (who knows such a move would hurt his prospects of winning the next election). The ethical problem here is for the budge group to look to satisfy the wishes of the most powerful stakeholders (such as the Mayor). Moreover, having been threatened that the next Mayor would fire all of them, the budget group members face the ethical dilemma of doing what is in their best interests (as the mayor implies) or doing what is right.
But public bodies serve the people, not those in power. What is ‘right’ in this case is what will be in the best interests of the most important stakeholders (even if not the most powerful, direct influencers of the budget process), the majority. These are the citizens.
Preparation, Execution and Evaluation of KelseyBudgeting Cycle
The preparation, execution and evaluation of the budgeting cycle must change in certain ways in consideration to changed fund availability. Initially, the city has used Line-Item Budget, which involves connecting and reporting information on inputs used to provide government services (Probst, 2009). However, this now changes to a Program Budget. This is where money is allocated to major program areas and accompanying activities. This approach is more centralized with focus on program goals(Probst, 2009).
At the preparation and execution, the budget groups consider the numbers and makes its decisions. For example, the lobbying by the police department for increased public safety tax makes sense, considering that the population is on the rise and surely there is need for more police officers and even that federal funds have been reduced. But in making these decisions, maybe it is important to inform the public of the circumstances first. Chances are the public will not accept increased taxes. But then again, it is not their decision. It is merely important that the people understand the situation and why such a decision has to be made rather than surprising them with it. After that, the budget team must undertake the lobbying of key personnel and institutions, which will involve explaining to them why the budget has to be as it is. They should be allowed to offer their opinions it must be distinguished between personal interests and opinions in the true interests of the citizens.
The Budgeting Approach and the Crime Issue
As already noted, the city should drop its Line-Item to Program Budget. Program Budget. As already noted, Program Budget allocates money to major program areas and the activities involved. This approach, therefore, favors the crime issue. As already noted, although other areas of the economy also require attention, the point is that the security docket faces an even dire need. It is clearly established that crime is on the rise. This is the one area in which the citizens raised most complaints. The police department, therefore, requires revamping. Whether the currently available funds, after allocations to other areas as well, will be enough is doubtful. But that is not the point. Rather, the point here is that security needs to be given special attention, even considering that the population continues to grow. In other words, it is better to attend to this issues sooner rather than later.
In this regard, focus is turned to the expenses and potential revenues for the major activities of the police department: administration; patrol; investigation; and community support. At the moment, the main activities to focus on are patrol (to help prevent crime, such as assaults, as well as breaking and entering and speed the time for response when crime is reported) and investigation (solving crimes).
Cost-Benefit Analysis
In local governments, cost/benefit analysis is part of the Capital Budgeting Process and the Capital Improvements Program (CIP) (Probst, 2009). It can be hard to measure the cost-benefit analysis of security. This is because the benefits of security are not direct. Instead, it can only be measured by how it contributes to other industries, which are more of indirect and intangible benefits (Mueller & Stewart, 2011).In this case, the budget group considered maximizing public welfare and maximizing profit in business.
Generally, the costs of crime include money, time, opportunity, personnel and equipment, public reaction and intangibles. In considering these costs if the issue of crime is not given the deserved attention, the budget group considered the public reaction on this matter. Because the previous year most complaints concerned the issues of security, the truth is that the city cannot afford to ignore these calls or it risks being unpopular which sidelines the citizens, who contribute in a big way toward fighting crime (such as through community policing). Besides, ignoring this issue would not go unnoticed to criminals. Consideration of intangibles focused on the potential consequence of decreased economic development opportunity.
In reverse, the budget group considered that attending to the crime issue would: increase public safety and accessibility; increase capacity of the police department; increase economic development opportunities; and ultimately, provide monetary profits (albeit indirectly).
Conclusion
This paper is a review of the considerations the Kelsey City’s budget group must consider in designing the budget. As the paper shows, ethical issues may arise and these must be taken into consideration; under the circumstances (reduced federal funding and the urgency of the crime issue), it is necessary to change from a Line-Item approach to a Program approach, paying special attention to the crime issue which is more urgent; and the there are various factors to considerincost-benefit analysis.
These decisions are not easy to make. Plus, whether the budget plan will be approved is another matter as there remain conflicts of interest among the various stakeholders. Still, the budget group has done its best, hoping the stakeholders cited (among others) will overlook their selfish interests for the benefit of all the people of Kelsey.
References
Mueller, J. & Stewart, M.G. (2011). Balancing the Risks, Benefits, ad Costs of
Homeland Security. Homeland Security Affairs, 7
Probst, A. (2009). Cost/Benefit Analysis. Local Government Center: Financial
Management Series, No.14
Probst, A. (2009). Local Government Budgets: Approaches and Traits. Local
Government Center: Financial Management Series, No.9
