Monday, June 25, 2007
Local Government Finance – Question 8
Question for Kaycee D, Cequita D, and CoShendra J. Why is most local government spending “relatively uncontrollable” and how does the practice of “earmarking” affect this? In your answer, explain what earmarking is and give the arguments for and against earmarking.
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4 comments:
Most local government spending is relatively uncontrollable because funds are planned and spoken for in a short amount of time for several years. That is difficult to do because things change so much over the years despite the fact that only a designated amount has been alloted for that particular year. Funds are alloted for things such as salaries and benefits, operating expenses and so on. The book mentions that about 90-95% or more of the budget is uncontrollable. This means that the local government usually ends up with not enough when budgeting for new demands.
Earmarking helps the uncontrollability of the annual budget. Earmarking is marking certain funds in advance for a specific use. These funds are generally placed in seperate accounting funds to make sure monies are spent correctly. Expamples of earmarking is school property taxes and garbage fees for sanitation or recreation charges.
Some believe that earmarking is good and fair because it lets people know where their money is being used. Some critics, on the other hand, believe that earmarking links funding to spending needs and essentially the most needy programs fail to get enough funding. Critics also believe that earmarking limits the ideas of elected officials. Despite the different judgements of earmarking, it is a tool that has been set in place to aid with uncontrollabilty of funds.
CoShendra J
Local government spending is “relatively uncontrollable” causing legislators to have little discretion on an annual basis concerning spending. The funds become committed for many years for things like employee salaries, benefits, operating expenses for building, offices, equipment, repayment of debt, and other purposed required by the state. This also makes the jobs of government officials hard because they do not have much money to budget for new things the state needs and demands that must be taken care of at once. Earmarking is when revenues are collected for use in certain ways. School property taxes are one example. This contributed to the uncontrollability. It can make an officials’ power limited.
-Kaycee Doying
Both answers did a good job in describing the uncontrollable nature of budgets -- most things you just gotta pay for (like public safety officers' salaries)so you have little choice as to how to spend the money.
Coshendra did a good job in explaining the pluses and minuses of earmarking. I would emphasize the point that this practice takes away power of local officials and ties their hands as to how to spend money.
Bob B
Most local government spending is relatively uncontrollable because they are not left with much time or money to accomplish things. In public finance, an earmark is a requirement that all or a portion of a certain source of revenue, taxes, must be devoted towards spending on a specific government purchases.
Cequita D Edmond
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