|Budget Tactics: Insights from the Trenches
Reprinted from Public Management, October 1993
Successful budgeting is an art form that requires analytical and interpersonal skills. Too often the focus is put on the technical and not the behavioral aspects of budgeting. To be really successful in budget skirmishes, however, one must learn what is considered acceptable behavior within ones own organization. From the budgeting workshops that I have conducted, I have collected responses from 387 city, county, and district staff members on 27 items describing what really goes on in the budgeting process. Here are insights from the responses to 10 of the items.
Burying Controversial Items in a Budget
The majority of the participants (69 percent) indicate that hiding controversial items such as electronic equipment or conference trips, so that elected officials will be less likely to find them and question them, is not an acceptable practice. Many budgeters feel that if they develop a reputation for this type of behavior, they will lose credibility and actually bring closer scrutiny to their budgets.
Trading one item for another is quite common, with 81 percent indicating that this is an acceptable practice. Trade-offs usually take the form of negotiations: Look, I will give up the request for two new positions this year if you will back us on the new computer system.
Flattering Budget Deciders
You bet! Flattering budget decisionmakers is part of the process. Seventy percent of respondents indicate that this is an acceptable practice. Flattery takes various forms, ranging from personal compliments to extolling the budget deciders keen insight and analytical mind. Flattery is viewed by many as a form of budget marketing.
Pretending to be Angry
As a tactic, pretending to be angry to win a budget argument is not considered acceptable by 71 percent of respondents. Many indicate that contrived anger can be detected fairly easily, and that, once a person has used this tactic, it is difficult to use it again. As one budgeter says, I do not believe in pretending to be angry, but I must confess that I do get angry!
Overwhelming with Technical Detail
Attempting to overwhelm or confuse budget reviewers with technical detail is cited by 35 percent of respondents as an acceptable practice. This approach is most often used by those who administer technical programs, such as engineers or redevelopment officials. The majority of survey participants (65 percent) feel that this is not an acceptable practice and can be identified easily. As one budget administrator says, Make them (technical program administrators) explain the detail supporting the budget proposal. If they can not explain it clearly, they probably do not understand it either.
Giving Money Back
Sixty-eight percent of the participants indicate that they would give money back at the end of the year if they have not used it. Many indicate that the willingness to give money back is increased if they know they will not be penalized in the next budget with a reduced base, and if they can get supplemental funding when needed.
Admitting to Poor Budget Decisions
Participants are evenly divided on this issue. Forty-nine percent indicate that they do not think it is a good idea to admit to making bad decisions in the past. Successful budgeting requires elected official confidence, and if I admit to a previous mistake, it will reflect on my future budgeting success. Fifty-one percent, however, indicate that admitting to a mistake builds credibility and enhances the budgeters reputation.
Making Budget Decisions Based on Intuition
Eighty-two percent of participants indicate that making budget judgments based on intuition is an acceptable practice. One administrator sums it up with this comment: While I prefer to rely on hard data, there are just too many unknowns in the budget process...at some point you have to go with your gut. Making good intuitive judgments is what they pay managers for.
Putting Giveaways in the Budget
Budgeting culture apparently condones the practice of putting items in the budget knowing that they will be cut out. Eighty-one percent indicate that this is an acceptable practice. The purpose of this tactic is either to give budget deciders something to cut out or to try to deflect the focus from more vulnerable programs.
Padding Budget Requests
Sixty-five percent of participants indicate that they pad requests. There seems to be a difference of opinion, however, as to the definition of padding. Some say it means providing a little safety margin for inflation. Others say that providing for inflation is good budgeting--genuine padding begins only after that.
Another issue relates to which items are padded. Most padders indicate that they do not pad everything, only selected items that do not receive close scrutiny. The range of responses as to what percentage of the budget gets padded runs from 0 to 40 percent, with the most common response being 5 percent. The two most often mentioned reasons for padding budgets are to offset budget cuts and to be able to respond to the inevitable, unbudgeted priorities that arise after a budget is adopted.
Participants say that padding is reduced when the chief administrator takes positive action to discourage the practice of padding. Often cited steps that can be taken include:
- Communicating the criteria used to make budget decisions.
- Giving program managers maximum flexibility to move dollars around within their budgets.
- Providing supplemental funding whenever a major, unbudgeted project or program is given to a program manager.
- Acknowledging and rewarding such good budgeting practices as not padding budgets, not spending money just because it is available, and implementing cost reductions.
This last point is crucial because it represents a reversal of the entrenched larger budgets mean higher pay operating norm that is prevalent in many governments. The challenge to local government administrators is to convince elected officials to implement substantive rewards for program managers to practice good budgeting.