The finance and budget constraints placed by the California government to its local government includes the revenue collection and revenue transfers. The local authority is supposed to collect revenues over a defined region. The revenue collected is required to be transferred to the state budget and financial authority for allocation. The local authority is required to use revenue transferred from the government, to finance its expenses. The state has an established a revenue transfer system that helps to monitor the revenue use at the local level. This helps the state to meet its budget expectations. The highest local expenditure which is financed by revenues from the state account for 40 percent of the state budget .
The Dillon rule helps to discuss on why local government should not have power. It relates local government to the state as a child to his parent. The rule establishes that the local government should not have power over its area of operation. The local authority powers should be regulated by the state. In this scenario, the local authority should have definite powers to make some decisions regarding their activities with their jurisdiction. Therefore, the rule is not applied in the state of California as the state recognizes the need for the local authority to make some decisions .
Any local authority units have powers over the area of operation. This makes the residents of the region to adhere to the sub rules set by the local authority. This ensures smooth flow of state expectations at the local level. The local authority powers are within their jurisdiction. Any decision that is above their framework of powers is required to be done the state itself. This is an indication that, their powers have a limit. The limit of the local authority powers is defined by the state in question. This means that, every state has it’s own local authority power definition.
In the state of California, the government recognizes the services offered by the local authority. The state has developed systems such as revenue transfer system. This opaque process creates an effective and efficient coordination between the state and the local authority. The system is important in financing the services offered by the local authority to the residents. The state capital budget amounts to about 40 billion dollars. This is allocated to various sectors in the state such as housing, infrastructure, health and public safety among others. The budget is as a result of a combination of local needs in various areas of the state.
The state budgetary procedures are updated and followed regularly. This makes it able to manage the failures in the previous budget and work on them in the next budget. This type of budgeting can be referred to as rolling budget. In this budget, success and failures of the previous budget are incorporated in the forthcoming budget. The budget process such as opaque process is followed in every accounting period. This enhances accuracy in the budgetary system reducing instances of high variability from the budgeted to the actual. The four parts of the budget cycle are thus followed. These steps include, formulation, legislation, implementation and evaluation.
Budgeting strategies are measures and steps taken by the state in determining the procedure of estimating its budget. The strategies are important as they act as a guide to the government in the way of determining its expenditure level. Similarly, these strategies help in the allocation of resources by the government. The allocation is done from bottom level expenditures to top levels expenditures or vice versa. In every governmental unit, these strategies are crucial. It is recommended to be applied in determining the budget level of these units.
The most common strategies used includes top bottom strategy or bottom top strategy. The two strategies are similar, but the mode of application is different. In top bottom strategy, the determination of budget starts with the top expenditure levels of the state’s activities moving down to the bottom expenditure levels. The bottom top strategy is opposite of top bottom. In terms of effectiveness, bottom top strategy is more effective than the top bottom as key issues affecting local authority are evaluated first. The local authority needs need to be prioritized since they are crucial in catering the residents' needs.
In the analysis of the budget of any country, the bottom top budgetary system shown more efficiency. The strategy involves incorporation of the needs of the residents from the local level. From experience, most of the state expenditure is at the local level. These expenditures involve educational needs, health needs, social amenity needs among others. In the analysis of country budget amount, these expenses need to be given priority. The strategy helps the planners and evaluators of budget to have a full analysis of the basic needs of the state as a whole. The other strategy focuses on the top level needs of the state which do not contribute to the local resident of the country. The bottom top strategy is recommended.
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