Political Science 102

1. Political Science 102 • State and Local Government • Bureaucracy and Budgeting

2. Public Management • Constraints: • Politics, opinion • Clients: • Citizens, legislatures, executives • Accountability: • To elected and appointed officials • Purpose: • Serve public interest, common good

3. Private Management • Constraints: • Markets, resources • Clients: • Customers • Accountability: • To customers, shareholders • Purpose: • Make profits, grow organization

4. Budgeting in State and Local Government • Budget Cycle • Actors • Pervasive Incrementalism • Types of Budgets • Reform

5. The Budget Cycle • fiscal years • not calendar years • 7/1 to 6/30

6. The Actors in Budgeting • Executive drafts the budget, • legislature gets to mark it up, • review process follows; • Interest groups, agencies also participate • Budget is adopted • Must be approved by legislature and governor • Agencies carry out their duties

7. Pervasive Incrementalism • one of many tactics • Always ask for more • Spend before end of fiscal year • Creative naming • Ex. Of calling sex ed “Teaching Values of Family” • Delay by studying • Unneeded items to pad budgets

8. Types of Budgets • line-item • budget for mgmt. & planning • Not just spending what’s allocated • Ensuring agencies comply with goals • performance budgeting • Ensuring efficiency and cutting waste • Capital budgets • Big expenditures • Multi-year projects • Often involves bonds

9. Budget Reform • balanced budgets • ways to circumvent • mutli-year capital budgets, • "off-budget" spending, • pension borrowing, • rainy day funds

10. Bureaucracy is a Growth Industry • 10% of U.S. workers are employed by • States • 3 Million employees • Localities • 7 Million employees • 10 Million out of 100 Million in the Workforce

11. Hiring Principles • Spoils system • Merit system • Fitness system

12. Why Spoils? • Incentive • Power to hire and fire • Replacing, not removing, interest

13. Merit System • Created by 1883 Pendleton Act • Curing the evils of party machinery • Spoils/Merit controversy actually killed a president • James A. Garfield killed by a disgruntled office seeker

14. Components of Merit System • Neutral competency • No politics becoming involved • Categorization • Specialization of jobs • Hierarchy of positions • Helps in writing the merit tests • Merit system patronage? • Governor appoints Civil Service Commission chair • Centralized control • Pay scales, raises, and duties are controlled in a single area

15. Representative bureaucracy • Why representative bureaucracy? • Representative = responsive? • active representation and passive representation. • Passive representation is simply another term for descriptive representation, where it consists of the “degree of congruence between the composition of a public bureaucracy and the society in which it exists” (Hindera 1993). • Active representation is another term for substantive representation, referencing the agency decisions that benefit the group of interest • Where representative? • Elites • Street-level bureaucrats • Affirmative action • Unions and collective bargaining • State bureaucracies are strongly unionized in comparison to rest of workforce

16. Illegal Patronage • Temporary appointments • Person stays if no replacement • Specific job descriptions • Tailor the description so only preferred person fits • Ignoring described duties • Moving people from one duty they are qualified for to the one you want • Stacking tests • If no test exists, write it to conform to your candidate • ‘Wait out the Register” • Interview people higher than your preferred, then pass them over until your person comes up

17. Changes in Bureaucracy • Total Quality Management • TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society • Focuses on consistency • Business abandoned this in late 1980s • Quality processes • Different from TQM, current model • Based more on customer feedback and efficiency • Privatization • Utilities are the current controversy

18. Responsiveness: 1)Objective – formal, written responsibility for the bureaucrat2)Subjective – a personal moral feeling of obligation3) Professional – Dedication to personal skills and expert knowledge.

19. Arkansas’ Bureaucracy • State rates highly in all categories • “A” Average overall • Highly rated on financial and capital management • Scores lowest on human resources

20. State Organizational Model

21. What are Arkansas’ agencies? • Correction • Economic Development • Education • Environmental Quality • Finance and Administration • Health • Highway and Transportation • Human Services • Labor

22. Organization of Arkansas Bureaucracy • Nine departments • Some areas are funded mostly from federal government • Transportation • Health • Social Services • Economic Development • Labor and Industrial relations

23. Administrative Strategy • Administrators must maintain good relations • With governors • And with legislators • But must isolate themselves • So they don’t get political flak

24. Administrative Power • Information • Legislators rely on bureaucracy for information • Selective or strategic distribution of info is wise for a bureaucrat • Fiscal Notes • Bureaucrats must write up analysis of a proposed law’s costs • Legal vagueness • Legislature lacks specific knowledge, must defer to bureaucracy in implementation.

25. Arkansas Budget and Appropriation Process Excerpted from Bureau of Legislative Research, 2006

26. Arkansas Budget Process • The State Fiscal Year Begins on July 1 and Ends on June 30. • A Biennial Period or Biennium is a two year period that usually begins July 1 of the odd-numbered year and ends June 30 of the next odd- numbered year.

27. Budget Calendar Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Budget Requests Prepared ExecutiveReview ALC/JBCHearings Official RevenueForecast Session Convenes JointBudget Meetings Legislature Adjourns OperatingBudgets Prepared

28. The Preparation PhaseA Budget Request - Line Item Format

29. Change Level 4 4 Positions & $300,000 Change Level 3 $18,000 Change Level 2 2 Positions & $450,000 Change Level 1 $300,000 Base Level- 16 Positions & $1,200,000 A Budget Request – Change Level Format New Inspectors Training Seminars Overseas Advertising Replace Old Computers Current Year Budget Plus PayPlan Less One Time Costs

30. Arkansas Budget Process • Yearlong process • Agencies prepare their own proposed budgets • Submits them to Governor’s Office • Governor Reviews and makes recommendations • Set Policy for Agency Requests • Forecast State Revenue • Recommend Budget For Next Biennium to ALC/JBC • Recommend Added Revenues as Needed • Governor makes decisions • Issues budget message to Assembly

31. Legislative Council / Joint Budget • 84 members • Consider Agency Requests & Governor’s Recommendation • Recommend Budgets to General Assembly • Recommend State Employee Salary Levels • Have Bills Prepared for Introduction

32. Joint Budget Committee • Legislature holds hearings • Committees and subcommittees allowed to mark up • Conference to resolve interchamber differences • JBC: • Consider ALC/JBC Recommendations • Consider Governor’s Revisions and New Programs • Consider Member-Sponsored Bills • Recommend Fiscal Bills and Pay Levels to General Assembly • Prepare Revenue Stabilization Amendment

33. Budget in the Ledge • “Legislators get caught spending inordinate amounts of time trying to save relatively trifling sums.” • Changing State Budgeting: S. Kenneth Howard, 1973

34. Preparation Authorization Budget Process

35. Appropriations • An appropriation gives the agency the authority to spend money if and when it becomes available.

36. = Appropriation is not Money

37. The Authorization Phase The Constitutional Requirements

38. Constitutional Restrictions • 2 Year Limit on Appropriations • Single Subject • General Appropriation Bill must "embrace nothing but appropriations for the ordinary expenses of the executive, legislative and judicial departments of the state” & be passed first • Appropriations must be in dollars and cents • Appropriations (except for education, highways, and debt of the state) must be approved by 3/4 affirmative vote

39. Appropriations • Our State Constitution puts some very strict requirements on enacting the budget.•There is a two year limit on appropriations. One legislature can't bind another. Every session makes its own budget. •The appropriation bill must have only one subject. The courts have ruled that the word "subject" is very narrow. Therefore, we have an appropriation bill for every agency. This results in Arkansas leading the nation in the number of appropriation bills. Last session we had 1,496 bills appropriating money compared to 1-5 for most states. •We must pass the bill for the expenses of the elected constitutional officers before any other appropriation bill is passed for the next biennium. We failed to do that in 1989 and had to have a special session to reenact every appropriation measure passed during the regular session. •Appropriations must state a maximum amount and can't be open ended.•Most appropriations require 3/4ths of the vote to pass.

40. Introduced Appropriation Bills

41. Types of Appropriation Bills • Regular Biennial Appropriation • –2-year period • –Effective July 1 • Supplemental Appropriation • –Effective before July 1 & usually immediately • –Usually adds to an existing authority • –State Funds usually come from an Accumulated Surplus or recovered Fund Balances • Construction • –State Funds usually from General Improvement Fund (Surplus & Interest Earnings) • Reappropriations • –Allows the Agency to spend the balance of an appropriation provided by another General Assembly. • –Not new authority to spend : usually for old construction projects

42. Preparation Authorization Funding The Budget Process

43. TOTAL STATE REVENUE 2006 FY General Revenue $ 5,180,059,838 Special Revenue 1,656,660,858 Cash Funds 3,489,121,218 Federal Funds 3,952,819,022 Trust and other Non Revenue 2,540,912,688 TOTAL STATE REVENUE $16,819,573,624

44. TOTAL STATE REVENUE – 2006 $16.8 Billion Trust & Other Non Revenue 15% General Revenue 31% Special 10% Federal 24% Cash 21%

46. SPECIAL REVENUES - 2006 $ 1,656.7 Million

47. Preparation Authorization Review / Funding Revise The Budget Process

48. CAUTION!!! “...since the practice of review and advice violates the separation of powers doctrine, [it] is unconstitutional.” CHAFFIN v. ARK. GAME & FISH COMM'N, 296 Ark. 431 (1988)

49. Review / Advice • CHAFFIN v. ARK. GAME & FISH COMM'N, 296 Ark. 431 (1988)757 S.W.2d 950 “The legislative practice of reserving the power of review and advice in an appropriated bill is the equivalent of approval or consent and the "advice" is tantamount to a legislative order on how to execute a contract; since the practice of review and advice violates the separation of powers doctrine, section 17 of Act 939 is unconstitutional.”Some appropriation bills contain language which require approval of the Legislative Council or Joint Budget Committee for various types of appropriation and fund transfers. The language further states that if the requirement of approval is ruled unconstitutional by a court jurisdiction, then the section containing the language is void.

50. Review / Peer Subcommittees • The Review Subcommittee looks at an average of 900 contracts per year.PEER (Performance Evaluation and Expenditure Review) reviews about 120 Misc Federal Grant Requests and 100 Interagency Contracts per year.