Journal of Public Budgeting, Accounting & Financial Management

Modlin, Steve

2011 Journal of Public Budgeting, Accounting & Financial Management

doi: 10.1108/JPBAFM-23-02-2011-B001

Studies involving the allocation of funds among local governments usually are broad in nature with foci based on a variety of factors ranging from service demand to performance outcomes. The conundrum of indirect costs allocation associated with service demand continues to confront local governments. The internal service fund (ISF) has been the primary device used in this endeavor, but over the past two decades, its utilization has decreased. County finance officers in the southeastern United States were surveyed to determine why the ISF is not as prevalently used as in previous years and what has happened to indirect costs as a result of these changes. Findings suggest many reasons for ISF's usage decline including limited usefulness and reallocation of indirect costs to departments. In addition, county governments with a cost allocation plan and larger budget sizes continue to use the ISF as an accounting device

Ványolós, István

2011 Journal of Public Budgeting, Accounting & Financial Management

doi: 10.1108/JPBAFM-23-02-2011-B002

This paper examines the role of state-imposed fund balance limitation on school district budgetary behavior in New York State between 1997 and 2004. The findings suggest that imperfect state limitations may lead to imperfect results. Compliance among New York state school districts with the two percent limit in the examined period is low. While the constraint does not limit unreserved unappropriated fund balances to two percent, it does influence the way districts form estimates of revenues and expenditures. Recent changes in the limitation (to four percent) do not fully address the flaws of the original rule (lax enforcement, applied on the budgeted level, and generous rules on reserves), thus no significant change in budget behavior is expected.

LaPlante, Josephine M.; Honadle, Beth Walter

2011 Journal of Public Budgeting, Accounting & Financial Management

doi: 10.1108/JPBAFM-23-02-2011-B003

In this introductory essay, the authors describe a new public finance characterized by enduring revenue constraints; mounting budgetary claims from accruing liabilities for post-retirement benefits for government employees, rising health care costs, and an aging population; and uncertainty about future budgetary demands and resource limitations. The new public finance is described as a convergence of economic and demographic forces with past practices that increased the fiscal vulnerability of states and local governments. The authors explain that states and local governments will not overcome challenges by relying upon traditional ways of thinking about and conducting business but instead must revamp frameworks for practice. Symposium papers are described as tackling several of the most pressing issues facing governments today with an eye towards rethinking customary approaches.

LaPlante, Josephine M.

2011 Journal of Public Budgeting, Accounting & Financial Management

doi: 10.1108/JPBAFM-23-02-2011-B004

The magnitude and immediacy of threats to the sustainability of state government programs call for significant changes in how we think about and make policies that influence the public budget. The Great Recession's prolonged battering of state budgets exhausted cutback strategies and has left policy makers with few options, producing a decision gridlock that is inescapable using traditional functional and line-item budget perspectives and embedded practices. Transforming state budgets requires an uncommon view. This paper identifies and describes seven overarching and pervasive habits in state policy making that contribute to unsustainable budgets. Although the applicability and commonness of each habit will vary by state, both individually and as a set the seven habits impart important handles for gaining greater control over a state's fiscal directions and fortunes.

Bartle, John R.; Kriz, Kenneth A.; Morozov, Boris

2011 Journal of Public Budgeting, Accounting & Financial Management

doi: 10.1108/JPBAFM-23-02-2011-B005

This paper examines trends in local government revenues and current challenges that local governments face in raising revenue. We alsolook into the future in an effort to make recommendations to localgovernments regarding their revenue structure. Important trends that wedocument include a long-term decline in the property tax and an increase inboth state aid and user charges. Recent economic changes present seriouschallenges for local governments due to volatility of sales taxes, decreasesin property values, and threats to state aid. As local governments shape theirrevenue structure, they will need to respond to external economic,technological and demographic changes. Only user charges offer hopefulprospects as a productive revenue source.