Budgeting: Politics and Power

A skillful balance of application and theory,Budgeting: Politics and Power,Second Edition, is a comprehensive yet highly accessible introduction to the politics of budgeting. Unlike other texts on the subject--which typically focus only on budgeting issues at the federal level--this book emphasizes budgeting at the state and local levels in order to translate budgetary politics in a way that is more relevant to the vast majority of students. Drawing on a wide range of academic disciplines, the book also incorporates numerous pedagogical features, including case studies, in-class exercises, discussion and review questions; many charts, tables, photos, and cartoons; a glossary of budgeting terms; and an appendix of key federal budgeting points. A Companion Website at www.oup.com/us/lewis offers links to videos, chronologies, other online resources, and more. NEW TO THIS EDITION * Frames markets alongside politics and democracy as key budget factors * Tracks the budgetary impacts of the recent recession and electoral shifts * Traces recent shifts in public opinion, ideology, and partisanship * Updates statistics and examples throughout the book, including the findings of the 2010 census and the most recent spending and revenue patterns * Updates issues, including one state's shutdown and a showdown with organized labor in another state * Includes new case studies, new and updated figures and tables, and an expanded glossary

Carol W. Lewis is Professor Emerita of Political Science at the University of Connecticut.

W. Bartley Hildreth is Professor of Public Management and Policy in the Andrew Young School of Policy Studies at Georgia State University in Atlanta.

Each chapter ends with Web Site Resources and Review Questions.
Preface
Why a New Edition?
A Different Take on the Subject
Organization and Learning Style
Acknowledgments
About the Authors
Introduction to Budgeting in a Democracy
Democracy
Markets
Politics
Theoretically Speaking
Web Site Resources
1. Follow the Money
What Is the Public Sector?
Why Do We Need to Make Political Choices?
Not a Brawl
Political Process
Do the Choices Matter?
Guarantee
Limits to Budgeting
How Does Democracy Affect Budgeting?
Accountability
Transparency
Responsiveness
Stewardship and Efficiency
What Is a Good Budget?
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Case: A Lesson in Political Muscle
2. We the People: Power and Participation
Do We Vote Our Budget Choices?
Voting Bundles, Not Budgets
Voting Political Parties
Voting Core Political Beliefs
What Does Governing Mean?
Can Citizens Speak to Political Leaders?
Transparency and Meaningful Participation
Voting Directly on Budget Choices
Are Citizens Self-Interested Rational Actors?
Emotional Language of Budgetary Politics
How Political Ideology Affects Budgeting
Is Lobbying Legitimate in Budgetary Politics?
How and Why We Lobby
Issue Networks
Does Public Opinion Influence Budgetary Politics?
Do Leaders Listen?
Interpreting Public Opinion
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Case: Where the Rubber Hits the Road
3. Fairness and Trust in Budgetary Politics
What's Fair?
Are Taxes Fair?
The Public's Perspective
Notions of Tax Fairness
Tax Burden
Taxes and Income Inequality
Fiscal Federalism and Tax Fairness
Is Spending Fair?
The Politics of Redistribution
Generational Politics
Spending across the States
Political and Budgetary IOUs
Are Citizens Satisfied with Performance?
Does Citizen Trust or Distrust Matter?
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Case: What's the Point?
4. Process Matters
How is the Budget "Game" Played?
How Did We Get Here?
What Is Executive Budgeting?
How Does Executive Budgeting Work?
Executive Formulation and Submission
Bouncing Off the Base
Budget Requests
Significance of Stage One
Legislative Review and Appropriation
Review of the Executive Budget Request
Limits on Legislative Powers
Line-Item Appropriations and Veto Power
Budget Blackout
Implementation and Audit
Allotments and Rescissions
Supplemental Appropriations
After the Books Are Closed
Summary of the Executive Budget Process
Why Take a Political Perspective?
How Does the Federal Entitlement Process Work?
The Art of the Budget Process
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Case: A Package Deal
5. Putting the Puzzle Together
What Rules Guide Putting the Budget Pieces Together?
Fiscal Rules for the Federal Government
Fiscal Rules for State and Local Governments
Fiscal Rules Are Norms
What Is a Balanced Budget?
Revision of the Budget during the Year
The "Is" of a Balanced Budget
What Happens When There Is No Budget or the Budget Is Not in Balance?
Financing the Federal Government's Annual Deficit by Issuing Debt
State and Local Government Debt
Budget Cutbacks
Is the Budget Sustainable Over Time?
Rainy-Day Budgeting
Public Sector Employee Benefits
Budget Sustainability
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Case: When Persuasion is Broke
6. Spending Public Resources
How Much Are We Spending?
Measuring Spending
Internal Dynamics: Percent Change and Rate of Growth
External Developments
A Slice of the Pie
Cost Structure Makes a Difference
Workforce and Payroll
Employee Benefits and Unpaid Bills
Why Is Some Federal Spending Kept Secret?
What Does Counterterrorism Cost?
What Are We Getting for the Money?
Why Do Budgets Grow?
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Case: Do-It-Yourself Government
7. A Taxing Subject: Raising Public Resources
Why Do We Pay for Public Services?
Willingness to Pay
Revenue Systems Serve Different Functions
Revenue and Civic Engagement
Strategies for Public Support
Who Makes Revenue Policy?
Political Pressure on Technical Experts
Revenue Power outside the Beltway
Political Pressure on Decision Makers
What Types of Revenue Does the Public Sector Use?
The Property Tax
The Income Tax
The Sales and Use Tax
Revenue Diversity
How Do Taxes Work?
The Sticky Problems of Tax Administration
Rules that Limit Tax Uses and Tax Increases
Nominal versus Effective Tax Rate
What Are the Five Principles of Taxation and How Are They Applied?
Applying Tax Principle #1: How Does Tax Policy Affect Economic Growth?
Applying Tax Principle #2: What is Efficient Taxation?
Applying Tax Principle #3: How Can Tax Policy Be Economical?
Forecasting Revenue
Price of Government
Tax Elasticity
Revenue Yield over Time
Other Concerns
Applying Tax Principle 4: How Does Transparency Make Taxation Responsive?
Applying Tax Principle #5: What Is a Fair Tax?
Benefits-Received Principle
Ability-to-Pay Principle
Tax Incidence
Taxes in the Global Economy
Can Governments Raise Revenue without Having Taxes?
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Case: A License to Prey?
8. Politics and Capital Budgeting
What Is Capital Budgeting and Why Is It Important?
Infrastructure as Durable Goods and Capital Assets
Doing Public Mega-Projects
Should Governments Plan and If So, How?
Identifying Capital Projects
Capital Programs and Budgets
Project Costs and Benefits
If Not Pay Cash, Then Why and When Borrow Money?
Debt Is Not Always Bad
Bond Ratings and Credit Quality
Debt Rules
State and Local Government Securities
Is There Such a Thing as Free Money?
State and Local Officials Look to the Federal Government
Local Officials Look to the States
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Case: Budget Busters!
9. How to Read a Local Budget
A Budget's Four Main Parts
Budget Message
Budget Summary
Detailed Schedules
Supporting Documentation
Eight Focal Points
1. Who/What?
2. Fiscal Year?
3. Operating or Capital Budget?
4. Legal Status of the Document?
5. Is the Budget Balanced?
6. What Fund Applies?
7. What Are the Budget Drivers?
8. Who/What Gets the Spotlight?
Proceed with Caution!
Go Beyond the Budget
Applications
Questions to Ask When Reading a Budget
Would You Vote for This Budget?
10. The Bottom Line
Why Does Budgeting Change and Yet So Much Stays the Same?
Sources of Change
Putting on the Squeeze
Budgetary and Political Time Bombs
How Do Today's Budget Decisions Affect Tomorrow's Democracy?
Long-Term Budget Commitments Undermine Democracy? Agree
Long-Term Budget Commitments Undermine Democracy? Disagree
How Are We Doing?
Transparency and Complexity
Financing Public Higher Education
Following the Money through a Maze
Accountability, Stewardship, and the Artful Dodge
Budget Gimmicks
Dodging Tough Choices
Efficiency, Effectiveness, and Performance
Responsiveness and the Role and Size of Government
Where Are We Headed?
Reforming the Federal Appropriations Process
Entitlement Reform
Closure Commissions
Reforming Earmarks
Other Reforms
What Can We Do about It?
Trust and the Political Deficit
Participation and a Challenge to Take Two Steps
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Case: The Gag Rule
The Big Picture: Integrating Questions
Appendix A. The Federal Budget Process
Appendix B. Glossary of Terms in Budgetary Politics
References
Index