Common Sense has advocated a top-down approach to spending. We believe a top-down
budget approach is essential. Typically, budgets have been developed ostensibly using a "bottom-up" approach wherein Departments
make requests; Managers review and cut; Boards review and cut further; Taxpayers vote and (often) cut more. In
the 90's, this bottom-up process has resulted in:
*BOE-requested budgets cut an average of nearly 40%.
*Unrealistic
budgets submitted in anticipation of likely cuts.
*Taxpayers forced to "make" the tough final cuts by rejecting budgets.
*Wasted budget preparation effort and possible disruption of plans.
*Managers & Boards potentially absolved of
responsibility for any consequences of final budgets.
*Polarization of townspeople.
*Needless expense of multiple
referenda.
*Possible loss of credibility of public officials.
While some improvement was noted after formation
of our group, initial submitted budgets still were too large.
What is needed is a "top-down" approach that sets reasonable spending
targets EARLY in the process and challenges management to meet targets with undiminished services. Equally important,
the targets MUST have some clear, defendable rationale behind them that is known, understood and accepted by the Public.
In reality, voters have often imposed top-down budgets at the 11th hour at referenda when they say, "We will approve this
much and no more." Thus, the town has often had the worst of both worlds: a bottom-up process ending with a late (and possibly
flawed) top-down budget. This situation was one of the key factors leading to the formation of the Common Sense group.
In
1999, the BOF attempted a top-down budget. While the timing was better, we believe the underlying rationale was flawed. Their
rationale appeared to be simply "Don't exceed a 1 mill increase". With this approach the taxpayer could look forward to a
near 1 mill increase every year. SPENDING, NOT MILL RATE, MUST BE THE FOCUS. The
goal is to set reasonable SPENDING targets and let the mill rate be a fall-out.
Our group has developed a top-down
approach that we believe has merit. A brief description of it follows.
*Basic spending (i.e. excluding major new Capital
items) is allowed to increase by the cost of living.
*All new revenue from
the Grand List increase is not automatically spent - only 80%
is.
*A spending reduction due to increased efficiency (0.25%) is required.
(For some time a factor of 0.5% was used. However, in recognition of efficiencies already made, a reduced factor is considered
appropriate at this time.)
*Spending for major new Capital items is then added
but only after items are well justified, well planned,and well publicized.
The advantages of the top down approach are as follows:
1. It is straightforward and easy to develop.
2. It is based on a reasonable rationale that voters can understand.
3. It provides a dollar value and a rationale that the voters can
endorse and rally around.
4. It works with the budget bottom line and, thus, avoids the potentially
divisive discussions over specific line items.
5. It requires officials to develop efficiencies and set priorities.
6. It provides early guidance to officials so that they can tailor their
budgets to a level that voters will support, thereby avoiding need for significant cuts.
7. It prevents disruptions to planning produced when budgets are rejected
at the 11th hour at referenda.
8. It can save money by avoiding multiple referenda.
All it needs is for officials to adopt the approach.
