Rodney E. Stanley, Ph.D. Associate Professor & Chair Department of Public Administration College of Public Service & Urban Affairs Tennessee State University The Role of AGA in the Public Policy & Budgeting Process in Tennessee

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

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.” “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 Three Levels of Public Policy Policy Choices Policy Choices Policy Formulation Policy Formulation Policy Outputs Policy Outputs Policy Implementation Policy Implementation Policy Impacts Policy Impacts Policy Evaluation Policy Evaluation

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

Policy Preferences: Where Do They Come From? Public Policy & Budget Theory Public Policy & Budget Theory Partisan Politics Partisan Politics Conservative/Liberal value judgments Conservative/Liberal value judgments Professional Hunch Professional Hunch

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

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

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

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).” “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. The documents include revenue information, expenditures, activities and purposes or goals.

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

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

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

Values in Public Budgeting & Public Policy Efficiency Efficiency Effectiveness Effectiveness Equity Equity Accountability Accountability

Accountability: The Role of AGA What is it and why is it important? What is it and why is it important? How is accountability of budgetary decision-making exercised in America? How is accountability of budgetary decision-making exercised in America? Through Democracy Through Democracy

Where Does Their Budget Authority Come From? Constitution Constitution Explicit or Implied? Explicit or Implied? 1921 Budget Reform Act 1921 Budget Reform Act Does the Bureaucracy have a constitutional legitimacy in the budget process? Does the Bureaucracy have a constitutional legitimacy in the budget process?

State Level Governor Governor Legislature Legislature Courts Courts Bureaucracy Bureaucracy

How Are Budgetary Decisions Made? Mixed-Scanning Mixed-Scanning Rationalism Rationalism Process Oriented Process Oriented Systematically Systematically

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

Problems With Mixed-Scanning Assumes that the correct mix of incrementalism and comprehensive modeling can be determined to make budgetary decisions. Assumes that the correct mix of incrementalism and comprehensive modeling can be determined to make budgetary decisions.

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

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

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

Problems With The Systems Approach No one has been successful in identifying what takes place in the “Black Box.” 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 that all inputs are knowledgeable and correct about the budgetary decisions at hand. Assumes all outputs can be evaluated. Assumes all outputs can be evaluated.

Summary of Public Policy & Budgetary Decision-Making The consensus suggests that all four types of decision-making are utilized in budgeting. The consensus suggests that all four types of decision-making are utilized in budgeting.

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