Rodney E. Stanley, Ph.D.

1
The Role of AGA in the Public Policy Budgeting
Process in Tennessee

• Rodney E. Stanley, Ph.D.
• Associate Professor Chair
• Department of Public Administration
• College of Public Service
• Urban Affairs
• Tennessee State University

2
Introduction

• Public Policy Defined
• Public Budgeting Defined
• Tennessee Lottery
• On what basis shall it be determined to allocate
  X dollars to activity A instead of activity B
  (V.O. Key, 1940)?
• The Perennial Budgeting Question is in essence a
  Public Policy Question.
• The Role of AGA in the Public Policy Process

3
What is Public Policy?

• Public Policy is the sum of government
  activities, whether acting directly or through
  agents, as those actions have an influence on the
  lives of citizens.
• Three Levels of Public Policy
• Policy Choices
• Policy Formulation
• Policy Outputs
• Policy Implementation
• Policy Impacts
• Policy Evaluation

4
Public Policy Outputs (choices put into action)

• Inputs -Parochial interests of the stakeholders
  involved in the process.
• Black Box Political negotiation that is not
  considered systematic.
• Outputs Budget document outlining purposes and
  goals.
• Evaluation Results are merged into inputs for
  future budgetary decisions.
• Environment the political culture of a nation,
  state or locality making budgetary decisions.

5
Policy Preferences Where Do They Come From?

• Public Policy Budget Theory
• Partisan Politics
• Conservative/Liberal value judgments
• Professional Hunch

6
Public Policy Impacts

• Defined as, The effect that both policy choices
  outputs have on citizens.
• Tennessee Lottery
• What citizen groups were effected by the adoption
  of the state lottery?

7
Tennessee Lottery Example

• Policy Choices Formulation
• Who were the stakeholders Why this particular
  policy?
• Policy Outputs Implementation
• What results in Higher Education have we
  witnessed?
• Policy Impacts Evaluation
• Is the Hope Scholarship working?

8
Public Policy Public Budgeting

• How important are fiscal resources in all three
  stages of policy formulation, implementation and
  evaluation?
• On what basis shall it be determined to allocate
  X dollars to activity A instead of activity B
  (V.O. Key, 1940)?

9
What is Public Budgeting?

• A collection of documents that refer to the
  financial conditions and the future plans of an
  organization (Lee and Johnson, 2004 16).
• The documents include revenue information,
  expenditures, activities and purposes or goals.

10
Purposes and Goals

• What are they?
• What function do purposes and goals serve in
  public policy budgeting?
• State Policy financial Preferences by those in
  power.

11
Dimensions of the Public Budget

• Political Instrument for Distributing and
  Redistributing Scarce Resources
• A Managerial Tool For Describing The Ways and
  Means of Program Funding
• Economic Instrument
• Accounting and Auditing Instrument

12
Services Provided

• Public
• Public Good
• Privatization/Contracting Out
• Externalities
• Responsibility and Accountability to Constituents

13
Values in Public Budgeting Public Policy

• Efficiency
• Effectiveness
• Equity
• Accountability

14
Accountability The Role of AGA

• What is it and why is it important?
• How is accountability of budgetary
  decision-making exercised in America?
• Through Democracy

15
Where Does Their Budget Authority Come From?

• Constitution
• Explicit or Implied?
• 1921 Budget Reform Act
• Does the Bureaucracy have a constitutional
  legitimacy in the budget process?

16
State Level

• Governor
• Legislature
• Courts
• Bureaucracy

17
How Are Budgetary Decisions Made?

• Mixed-Scanning
• Rationalism
• Process Oriented
• Systematically

18
Mixed-Scanning

• Incrementalism and Rationalism combined
• Small Marginal changes are made at the request of
  political players, as a result of the political
  process.
• Based on previous years figures
• Comprehensive analysis utilizes data sources and
  statistical techniques

19
Problems With Mixed-Scanning

• Assumes that the correct mix of incrementalism
  and comprehensive modeling can be determined to
  make budgetary decisions.

20
Rationalism

• Cost/Benefit Analysis
• Define a problem
• Solution
• Alternative Solutions
• Analysis
• Select the program or service that offers the
  greatest good for the greatest number
  (Utilitarianism)

21
Problems With Rationalism

• Assumes that enough time and data exists to make
  every budgetary decision.
• Unrealistic
• Complicated
• No specifications for evaluation

22
Systems Approach To Budgeting

• Inputs -Parochial interests of the stakeholders
  involved in the process.
• Black Box Political negotiation that is not
  considered systematic.
• Outputs Budget document outlining purposes and
  goals.
• Evaluation Results are merged into inputs for
  future budgetary decisions.
• Environment the political culture of a nation,
  state or locality making budgetary decisions.

23
Problems With The Systems Approach

• No one has been successful in identifying what
  takes place in the Black Box.
• Assumes that all inputs are knowledgeable and
  correct about the budgetary decisions at hand.
• Assumes all outputs can be evaluated.

24
Summary of Public Policy Budgetary
Decision-Making

• The consensus suggests that all four types of
  decision-making are utilized in budgeting.

25
Conclusion

• On what basis shall it be determined to allocate
  X dollars to activity A instead of activity B
  (V.O. Key, 1940)?
• Incrementalism
• The Perennial Budgeting Question is in essence a
  Public Policy Question.