Introduction
The articles under discussion are devoted to the issues of capital budget and its peculiarities (Lowenstein, 2010a, 2010b). The first guideline “Understanding New York City’s Budget A Guide to The Capital Budget” deals with all the general points concerning the Capital Budget, its allocation and accountability. The second guideline represents an extended version that covers some specific aspects, like tradeoffs and fiscal discipline. Both editions are aimed at encouraging active citizens’ participation in the Capital Budget’s regulation process.
Capital Budget”S Establishment
The articles begin with revealing the essence of the Capital Budget’s concept. According to the guidelines, it is represented by certain funding plans for different city affairs from construction projects to purchases of land or equipment. This budget is annually submitted by the Mayor. After the City Council admits its final version, it is also necessary that Mayor’s Office of Management and Budget provides its approval for arrangement on the planning list. The Capital Budget is one of the numerous elements of the general City’s Budget. Other components are represented by the Expense Budget, the Revenue Budget, the Financial Plan, the Contract Budget, the Capital Program and the Ten-Year Capital Strategy.
Capital Budget”S Allocatiom
The allocation of the Capital Budget is a complicated multi-level process. Every single project needs to be authorized by OMB that defines the amount of the
bankroll and the affair’s timing. The major part of the capital commitments is normally assigned for environmental protection, education and transportation. Five percent of
the Capital Budget is allocated to the Borough Presidents. This sum is then distributed among the presidents with consideration for the borough’s size and its population. According to the guideline, the least amount of money is spent on the city’s recreation and culture– these spheres receive only one percent from the Capital Budget.
Capital Budget”S Accountability
The base report that presents a detailed plan of the lay out expenditures is the Capital Commitment Plan. Moreover, one of the principle mechanisms of tracking the accountability of the Capital Budget is regular oversight hearings. They enable the Council to evaluate the effectiveness of the agency’s work as well as to follow their progress in complying with demand. Other means of monitoring the budget’s accountability are any types of audits performed by the City Comptroller’s Office. All the data concerning the asses of the accountability of the budget is provided in The Mayor’s Management Report two times a year.
Capital Financing
The Capital Budget is closely connected to the Expense one. Being obliged to handle all the local improvements, the city has to take on a long-term liability commitment. For that reason, a part of its Expense Budget is annually used for covering the debt service. The main types of Capital Financing are represented by the General Obligation, the Transitional Finance Authority, the Conduit Debt and the Pay-As-You-Go Capital.
Conclusion
The articles give readers an opportunity to form a clear idea of what the city’s budget is. They give a detailed explanation of such key points concerning the Capital Budget as its establishment, the allocation and the ways to estimate its accountability. The sources also highlight the problem of the city’s debt and the types of Capital Financing. The articles are supplied with short glossaries of basic budget terms. Finally, the guidelines offer useful references containing telephone numbers that can be contacted for extra questions on the City Budget’s issue.
References
Lowenstein, R. (2010a). Understanding New York City’s Budget A Guide. New York, USA: Independent Budget Office.
Lowenstein, R. (2010b). Understanding New York City’s Budget A Guide To The Capital Budget. New York, USA: Independent Budget Office.