Kelsey State Budget Proposal for Fiscal Year - Essay Example

?TOPIC: KELSEY BUDGET PROPOSAL FOR FISCAL YEAR 0 Introduction; This report intends to table financial budget plan proposal of Kelsey state for the year June 2012 to June 2013 Kelsey state fiscal period. This year financial budget has proposed an introduction of an extra fund to be allocated towards security operations around the city of Kelsey and its environs. This extra fund to be allocated to the security operation will cost the state more they can by raising through taxation and the federal government local government pass fund. This fund has remained noncommittal to add to the state with more funds, rather, it has adopted a policy to reduce states funding. Thus, an external way is proposed to finance the budget deficit financed by collection of taxes. The budget deficit is expected to accrue from the demand of residents of Kelsey state for more security operations around the City of Kelsey to curb the rising insecurity levels in recent times (Premchad 1989). Also, the recent federal government policy to cut down state government financial allocations will reduce the amount of funds needed to satisfy all the state priorities. The money sourced from the new source is to be fully allocated to the security department within the city council of Kelsey. This will be essential for more local policing surveillance around the city and its environs. Also, in order to fill the deficit created, the budget committee has proposed a number of fund reductions in some state operations in the coming year. The fund that would have being allocated to the proposed departments to face fund reduction, is under the proposal of the committee to be channeled towards hiring more police officers, increased surveillance and building of new prisons in the coming fiscal year (Adams and Williams 2010). 2.0 June 2012/ June 2013 Budget Plan; The budgetary plan for this fiscal year as illustrated below is an outline of the general framework of budget goals and objectives that needs to be met on state operations, servicing debts, capital expenditure, state reserves and financial reporting (Lee, Joyce and Wayne 2008). The budget plan proposal for this fiscal year provides standards that can allow current budget performance to be measured against in the future budget proposals that may face similar or unique problems the city of Kelsey is currently facing. The city is facing a security threat from a rate of crime it has never faced before. The rate of crime has been noted as a big threat towards the social, political and economical development to the resident of Kelsey city. This has called for an immediate action against the crimes to prevent the city from the posing disaster. I, as the budget manager of Kelsey state fiscal budget together with the budget committee have come up with a budget proposal that tries to reflect the cure of the problem (Riley and Colby 1991). The annual budget, under the fiscal policy of Kelsey state as per the state statue is adopted by November and completed in June. The budget is required under the state fiscal policy also, to be debated for six months prior to its adoption. Under the current environment of an escalating crime level, I have proposed that the fiscal cycle to be amended in order for the security concerned departments to access funds to curb the crimes. The budget proposal should be debated in the month of May by the mayor and the council and adopted in June. This has been noted that it will be against the fiscal policy of Kelsey state, but it will be necessary in the fight against the crime level before it hits uncontrollable level. 2.1 Operating budget plan; The current revenues will not be enough to finance current operating expenditures. This is as a result of the proposal to increase budget allocation towards policing operations. The estimated general fund for the state operating revenue is expected to be $ 40 millions and the expenditures under operations are expected to be $ 50 millions. The ratio of the two estimates stands at 1: 1.25 which means the estimated operation expenditures will be constrained to be achieved due to lack of enough funds. The committee noted the deficit in the proposed operation estimates as being caused by the recent demand from the public for an increment in security operation in and out of Kelsey. The committee was of the view that the demand by the public for an increment in the security operation in Kelsey is vital towards development and stability of the state and cannot be ignored (Tucker 2004). Revenues and expenditures of this fiscal year will not be used to project the next five years because the financing of the expenditures has part which is not consistent with fiscal policies of Kelsey state. The state fiscal policy has been that the current year financial budget is used to project revenues of the next five years by updating annually. Current fiscal budget policy on revenue and expenditure is usually projected from the previous fiscal year revenue and expenditure policy. Also, this year revenue and expenditure policy adjusted from Kelsey state fiscal policy because it did not follow the projection that were completed in the comprehensive financial plan in 2011 updates as it has been faced with an unprecedented situation that could not have being projected before. 3.0 Capital budgeting; The state policy towards capital improvement has been that a five year program is prepared and updated annually and it should also include sources of anticipated funds. The security threat facing Kelsey city has caused a change towards following the state fiscal policy on capital development. The state has to develop infrastructures to curb the vice it has not planned in the five year capital improvement charter. The development of the new infrastructure will force the state to drop some the capital development program it had planned in order to build crime related infrastructures. 4.0 Budgeting approaches; The committee on budgetary policies decided that the funds to finance the security operations will be raised by borrowing from the public market. The decision to raise the fund in the public market is against the fiscal policy of Kelsey state to cover for programs that have less than 5 years lifespan. The state has been selling a bond that has more than five years project completion time and whose payment period extends to a period higher than the project completion time under consideration. Also, the state fiscal policy has been that, bond financing strategy is to be employed in financing projects that are of capital expenditure nature. The credit rating of the council is at AAA standards which make it favorable for the state because the interest rates attraction will be lower. Since the problem that needs to be fixed only extends for only one year, it will not be possible for the council to repay back within the lifetime of the program. Also, the reserve policy of the state of maintaining a 25 percent of general fund revenue as balance coverage will be reduced to 20 percent. The fund that would have being allocated to the reserve account will be directed towards financing the security operation. 5.0 crime management financial plan; The state expenditure structure is comprised of personal services account, capital, fees and service account and materials and supply account. To deal with the escalating crime which has been registered as the highest in the history of Kelsey city, a new expenditure account called security account has been proposed to cater for the policing issues this fiscal year. The budget committee has decided to review the state fiscal policy on fund allocation in the traditional expenditure account to help allocate funds in the new established expenditure account. Under the state fiscal policy, personal account takes 80%, fees and services 10%, material and supplies 10% and capital 5%. To allocate funds to the new account, each of the account will be reduced by 40% of their past policy budget allocation. The Financial systems of expenditure monitoring, incomes and agenda performance on an ongoing basis will be adjusted to make it possible to measure and implement the new police operations (Adams and Williams 2010). The ongoing monitoring system will adjust from previous held fiscal management policy of monthly reviews and payments and purchasing requisition to a period of one week. This is to help the policing department at city council make affront reasonable actions that helps in curbing the dynamics of the crimes as they rise. The security department at the city council is directed to allocate in its budget plan funds to hire new police officers and in facilitating community policing. 6.0 Cost benefit of the budget plan; The state of Kelsey has good credit rating of AAA standard that enhances the state to borrow money in the public market by way of issuing a local government bond at a relative low price. That means the state has a cheap means of raising funds to finance the deficit that would be created by increased security operations in the city of Kelsey. The resident of Kelsey will not face an increase in taxes that would see them lowering their incomes with the call for an increase in budget allocation towards security operation. That means the consumption level of the Kelsey residents will not reduce with an increased funds allocation in the security department as it would have being if new taxes are introduced. Thus, the state will solve the problem of the insecurity by increasing more funds in the security department without reducing the sales tax revenue it collects from direct sales under tax election of 1993. References Adams, G and Williams, C (2010). Buying national security: how Americans plans and pays for its. Oxford press. Washington. Holcombe, R and Sobel, R (1997). Growth and variability in state tax revenue: an anatomy of a state. McGrew Hill press. New York. Lee, R , Joyce, P and Wayne, R (2008). Public budgeting: planning and budgeting. Oxford press. New York. Premchad, A (1989). Government budgeting and expenditure controls: theory and practice. Telco publishers. California. Riley, S and Colby, P (1991). Practical government budgeting: a work book for public managers. McGrew Hill press. New York. Tucker, P (2004). Analytical perspective: budget of the United States Government. Telco publishers. California. Read More