FISCAL CONDITION ANALYSIS11Fiscal Condition Analysis for M

FISCAL CONDITION ANALYSIS
11
Fiscal Condition Analysis for Maumelle, Arkansas
Angel Cuffie
Liberty UniversityIntroduction
The worksheets are missing, a serious omission.Financial
Condition
Financial condition is described as the ability of organizations
or institutions to create a balance between recurring
expenditures and recurring revenues. According to Singla et al.
(2018), it is the ability of institutions to raise funds. A strong
financial condition indicates effective operations which results
in profitability and the revenues exceed expenditure. On the
other hand, a weak financial condition reflects a situation where
institutions are unable to cater for their expenditure. For
government entities, a good financial condition gives the entity
the ability to provide essential services in an effectively and in
a continued manner. It also ensures that services are offered
even at adverse financial situations. In the contrary, government
entities with weak financial conditions are unable to provide
services and are faced with challenges such as disruptions in
service delivery and have limited resources to cater for its needs
(Singla et al., 2018). To maintain a strong financial condition,
the government must take considerations to make long-term
changes especially planning for developments for the future.
Financial Indicators for Fiscal Financial Analysis
A single measure cannot effectively capture the financial
condition of an entire government entity therefore a

comprehensive technique that emphasizes on both internal and
external fiscal factors. There are numerous indicators for fiscal
financial analysis (Sebestova et al., 2018). The financial
indicators are broadly categorized into revenues and
expenditures. Revenue financial indicators include total
revenues, total revenues per household, intergovernmental
revenues as a percentage of operating revenues, property tax
revenues, sales & use tax revenues per household, restricted
revenues to mention a few. On the other hand, expenditure
financial indicators include total operating expenditure per
household, fringe benefits, fixed costs as a percentage of
operating expenditures, debt per household among others.
However, this fiscal condition analysis will only focus on the
following five indicators;
Revenues
· Total Revenues
· Property Taxes
· Sales Taxes
Expenditures
· Operating Expenditures
· Personnel CostsAdjusting for constant dollars
While dealing with dollars in a range of time, the dollars have
to be converted into constant dollars. According to Johnson
(2020), converting current dollars to constant dollars helps
financial analysts to take into account the appearance of growth
that maybe accrued to inflation. Inflation changes the
purchasing power of the dollar over time. In this fiscal
condition analysis, all the dollar values are converted into

constant 2020 dollar values. Revenue Indicators
Total Revenues per Household
Description: As a city’s population grows, it is anticipated that
the needs for services will increase in a direct relationship.
Therefore, the level of revenues per households should at least
remain constant and at a minimum, equal to operating
expenditures per household. If operating revenues per
household decrease or become lower than operating
expenditures per household, it may hamper a city’s ability to
maintain the existing level of services unless new sources of
revenues or ways of trimming expenses can be found.
Warning Trend: Decreasing total revenues per household
Revenues determines the ability of government entities to
provide services. The essential issues that should be observed in
relation to revenues of a government entity are the growth,
reliability, diversity, and administration (Kopanska, 2018).
Revenues is expected to grow at a relatively higher rate
compared to both inflation and expenditures combined.
Revenues should depict flexibility to accommodate for the
changes and adjustments that may be necessary in the
government service provision. Revenues should also show
diversity in the manner that resources are not only relied from
same sources such as residential reliance, commercial or on
external funding from grants and discretionary states. User fees
are to be evaluated and revised on regular patterns to ensure the
true cost of services provided is effectively represented.
Effective analysis of the revenue structure helps to depict
challenges such as deterioration of the revenue base, internal
procedures that may negatively affect the revenue, over
dependence on some sources for revenue, user fees that may not
cover provision of services effectively, the changes in tax
burdens, and inefficiency in revenue collection.Total revenue

per household
It is expected that as the population of Maumelle, Arkansas
grows, the need for services provided by the government also
increases. Therefore, it is essential for the levels of revenue per
household to remain in the constant or maintain a level that is
able to cater for household expenditure per household (Chernick
& Reschorsky, 2017). A reduction of the of the operating
revenue per household to a lower level compared to the
operating expenditure per household may cause inabilities of
the government to provide services effectively. This is because
it hampers the ability of the government to maintain the
provision of services. New ways of revenue collection may be
needed, or a reduction in operating expenditure per household
to curb the challenges created by a reduction in total revenue
per household.
According to the analysis of the Maumelle, Arkansas, there is
an increase in total household per household which does not
indicate a red flag since the warning trend is a decrease in total
revenue per household. A decrease in total revenue per
household is depicted from 2018 to 2019. This may be accrued
to a reduction in revenue margins, an increase in household, or
even an increase in operating expenditure per household
(Chernick & Reschorsky, 2017). An increase in total revenue
per household is depicted from 2019 to 2020 which is a positive
move for the government. The increase may be due to
introduction of new revenue sources such as grants and
donations, reduction in taxes, or a reduction in operating
expenditure. The implication of the reduction that was observed
in 2018 to 2019 would include increased taxation to curb for the
deficits, or in adverse situations, the government may be unable
to provide services effectively. On the other hand, the increase
in total revenue per household registered in 2019 to 2020 may
imply better services from the government and reduction of

taxes.
Table 1. Total Revenues per Household (2020 Dollars)
201820192020
Total Revenues $13,418,116$13,943,768$19,817,189
Total Revenues (2020 $) $13,829,786$14,115,790$19,817,189
Households 3,782 4,046 4,394
Total Revenues per Household (2020 $) $3,657$3,489$4,510
Chart 1. Total Revenues per Household
$3,657$3,489$4,510$0$500$1,000$1,500$2,000$2,500$3,000$3,
500$4,000$4,500$5,000201820192020Total Revenues per
Household (2020 $)
Property tax revenue
Property Tax Revenue
Description: Local property tax revenues are driven primarily
by the value of residential and commercial property, with
property tax bills determined by the local government’s
assessed mill levy on the value of property. Property tax
collections lag the real estate market, because local assessment
practices take time to catch up with changes. As a result,
current property tax bills and property tax collections typically
reflect values of property from twelve to eighteen months prior.
A decline or diminished growth rate in taxable value may result

from a number of causes such as an overall decline in property
values, the transfer of taxable property to organizations that are
exempt, or a decline in new development.
Warning Trend: Declining or negative growth in property tax
revenues
Property
tax revenue is greatly influenced by the value of both
residential and commercial properties. The property tax bills are
essentially determined by the government depending on the
value of the property (Shazmin et al., 2017). In most cases, the
real estate markets are lagged in property tax collection because
the collection and assessment take a lot of time. Therefore, the
bills that are subjected to property taxes are not up to date. In
fiscal condition analysis, the warning trend for property tax
revenue is the reduction or decline in property tax revenue. A
decrease in property tax revenue may be accrued to several
factors such as a reduction in the value of properties, a
reduction of new developments, or transfer of taxable properties
to institutions that are exempted from tax.
From the analysis of Maumelle, there was an increase in
property tax revenues from 2019 to 2020. This is a positive
depiction of the trend, and may it is significant in that the
government has increased total revenue, which is essential for
service provision (Shazmin et al., 2017). Similarly, it reduces
the tax burden on other sectors, which relieves taxpayers. The
implication of this increase may include an increase in property
values or an increase in new developments. On the other hand,
there was a decline in property tax revenue from 2018 to 2019,
which depicts a critical warning. This decline may be caused by
decreased new developments, a reduction in the value of

properties, or increased transfer of taxable properties to
institutions with exemptions in tax
.
Table 2. Property Tax Revenues
201820192020
Property Tax Revenues* $2,050,000$2,050,000$2,200,000
Property Tax Revenue (in 2020 dollars)
$2,112,894$2,075,291$2,200,000
Chart 2. Property Tax Revenue
$2,112,894$2,075,291$2,200,000201820192020Property Tax
Revenue (in 2020 Dollars)
Sales tax revenues as a percentage of total revenues
Sales Tax Revenue as Percentage of Total Revenues
Description: Changes in economic conditions are also evident
in terms of changes in sales tax collections. When consumer
confidence is high, people spend more on goods and services,
and city governments benefit through increases in sales tax
collections. Prior to the recession, consumer spending was also
fueled by a strong real estate market that provided additional
wealth to homeowners. The struggling economy and the
declining real estate market have reduced consumer confidence,
resulting in less consumer spending and declining sales tax
revenues.
Warning Trend: Declining or negative growth in sales & use tax
revenues
Changes in sales tax revenues depict the changes that are
eminent in the economic activities. An increase in the

consumption of goods and services increases the sales tax
revenues to the government. On the other hand, a decline in
confidence in spending on goods and services by consumers
reduces the amounts collected for sales tax revenues (Fiscal,
2020). The warning trend in this condition is a decline in sales
tax revenue as a percentage of total revenues. From the
analysis, Maumelle depicted an increase in sales tax revenues as
a percentage of total revenues from 45.8% in 2018 to 57.6% in
2019, indicating a favorable position. The significance of thi s
trend is that the government can avail better services. The
implication of the trend suggests better spending of goods and
services by consumers, which improves that economy.
However, there was a reduction in sales tax revenue as a
percentage of total revenue from 57.6% in 2019 to 41.6% in
2020. This is a red flag and depicts challenges eminent in the
economy. The implication of the decline includes a reduction in
consumers' confidence in spending on goods and services. It
also implies a reduction in operating expenditure due to a
decrease in operating revenues.
Table 3.Sales Tax Revenues as a Percentage of Total Revenues
Description
201820192020
Total revenues 13,829,786$ 14,115,790$ 19,817,189$
Sales tax revenues 6,333,530$ 8,124,003$ 8,248,000$
Sales and use revenues as a percentage
of total revenues 45.8%57.6%41.6%
Chart 3.Sales Tax Revenues as a Percentage of Total Revenues
45.8%57.6%41.6%0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.
0%201820192020Sales Tax Revenues as a Percentage of Total
Revenues
Expenditure indicators

Expenditures illustrate the output in the form of service
provision. A higher expenditure indicates a higher service
provision rate or high-quality services (Fiscal, 2020). In some
situations, it can be an indicator of challenges in budget
allocations. Analyzing the expenditure can be essential in
determining problems such as excessive growth of overall
expenditures compared to revenue growth, unfavorable increase
in fixed costs, ineffective budget controls, and creati on of
future expenditure liabilities.Operating expenditure per
household
Operating Expenditures per Household
Description: Operating expenditures per household reflect
changes in expenditures relative to changes in population.
Increasing per household expenditures can indicate that the cost
of providing services is increasing at a pace beyond the city’s
ability to pay. If spending is increasing faster than can be
accounted for by inflation or new programs, it may indicate that
a city is spending more funds to support the same level of
services or the methods of providing the services are inefficient.
Warning Trend: Increasing operating expenditures per
household
Operating ex
penditure per household indicates the relationship between
expenditure and the population. An increase in operating
expenditure per household may depict an increased rate of the
need for service provision compared to the ability of the
government to pay (Kushner & Ogwang, 2017). The warning
trend in this analysis is increasing operating expenditure per
household. According to the analysis, there is no alarm for
alarm since it depicts an overall decline in the operational
expenditure per household. Although there was a significant
increase from 2019 to 2020, the general trend indicates a

reduction in operating expenditure per household. The
significance of this trend may suggest effective and efficient
management in the government.
Table 4. Operating Expenditure per Household
Operating Expenditures Per Household 201820192020
Operating Expenditures $3,168,819$3,163,452$3,605,944
Operating Expenditures (2020 Dollars)
$3,266,039$3,202,479$3,605,944
Number of Households 378240464394
Operating Expenditures Per Household (2020 Dollars)
$864$792$821
Chart 4. Operating Expenditure per Household
$864$792$821$740$760$780$800$820$840$860$880201820192
020Operating Expenditures Per Household(2020 Dollars)
Personnel costs per household
Personnel Costs per Household
Description: Employee wages and benefits can represent a
significant cost to a city. Some benefits are mandated such as
FICA, workers compensation and unemployment. Others, such
as health insurance and retirement are discretionary.
Warning Trend: Increasing personnel costs per household
The costs accrued to employees' payments may is a significant
indication of the expenses in the government. This includes the
costs of benefits to employees that the government accrues in

its costs (Kushner & Ogwang, 2017). The warning trend is an
increase in personnel costs per household which is not depicted
in the analysis of Maumelle. The trend indicates a decline in
personnel costs per household from 2018 to 2020. This suggests
an improvement in the effectiveness under which the
government is managing personnel expenditures.
Table 5. Personnel Costs per Household
Personnel Costs Per Household 201820192020
Personnel Costs $9,736,012$10,306,516$11,094,892
Personnel Costs (2020 Dollars)
$10,034,714$10,433,666$11,094,892
Number of Households 378240464394
Personnel Costs Per Household (2020 Dollars)
$2,653$2,579$2,525
Chart 5. Personnel Costs per Household
$2,450$2,500$2,550$2,600$2,650$2,700201820192020Personne
l Costs Per HouseholdYearsPersonnel Costs Per
Household(2020 Dollars)
Biblical perspective
The Bible has prudent illustrations that explain the importance
of effective management of finances. According to the Bible, it
is wise to plan since it yields better results. The Bible says,
“The plans of the diligent lead to profit as surely as haste leads
to poverty” (Proverbs 21:5, ESV). Therefore, governments and
institutions should plan for expenditures, balancing them
efficiently with the collected revenues. Concluding Remarks
In conclusion, the financial condition is described as the ability
of organizations or institutions to create a balance between
recurring expenditures and recurring revenues. A robust
financial condition indicates effective operations, which results

in profitability, and the revenues exceed expenditure. On the
other hand, a weak financial condition reflects a situation where
institutions cannot cater to their expenditure. Therefore,
governments need to have adequate fiscal condition analysis and
evaluations to manage expenditure and revenues effectively.
References
Chernick, H., & Reschovsky, A. (2017). The fiscal condition of
US cities: Revenues, expenditures, and the “Great
Recession.” Journal of Urban Affairs, 39(4), 488-505.
https://www.tandfonline.com/doi/abs/10.1080/07352166.2016.1
251189
Fiscal, Y. T. D. State Tax Revenues Continued to Decline in
May 2020.
https://www.urban.org/sites/default/files/2020/07/01/monthlystr
h_may2020.pdf
Johnson, R. W. (2020). How Does Earnings Inequality Affect
Social Security Financing. Insight.
https://www.aarp.org/content/dam/aarp/ppi/2020/05/how -does-
earnings-inequality-affect-social-security-
financing.doi.10.26419-2Fppi.00104.001.pdf
Kopańska, A. (2017). Local governments' revenue and
expenditure autonomy as a determinant of local public spending
on culture. An analysis for Polish rural
municipalities. International Advisory Board, 532.
https://www.researchgate.net/profile/Nakije_Kida/project/Forei
gn-Direct-Investment-Environment-and-Economic-
Growth/attachment/5924ad9e82999cd4856e794b/AS:[email prot
ected]/download/12th_ICSS_2017_Proceedings_Book_ISBN978
8890916106_Vol1.pdf?context=ProjectUpdatesLog#page=532
Kushner, J., & Ogwang, T. (2017). Why do per-household
expenditures differ between municipalities? 1. Public Finance
and Management, 17(4), 303-324.
https://search.proquest.com/openview/e73432ce689615c63a387
600d16b0fa2/1?pq-origsite=gscholar&cbl=44221
Sebestova, J., Majerova, I., & Szarowska, I. (2018). Indicators

for assessing the financial condition and municipality
management. Administration & Public Management Review,
(31). https://www.ceeol.com/search/article-detail?id=718510
Shazmin, S. A. A., Sipan, I., Sapri, M., Ali, H. M., & Raji, F.
(2017). Property tax assessment incentive for green building:
Energy saving based-model. Energy, 122, 329-339.
https://www.sciencedirect.com/science/article/pii/S0360544216
318850
Singla, A., Stritch, J. M., & Feeney, M. K. (2018). Constrained
or creative? Changes in financial condition and entrepreneurial
orientation in public organizations. Public Administration,
96(4), 769-786.
https://onlinelibrary.wiley.com/doi/abs/10.1111/padm .12540
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Thread:
Budget
Post:
Budget
Author:
Angel Cuffie
Posted Date:
June 8, 2021 5:59 PM
Status:
Published
Budget cycles are essential as they help control costs, making it
easier for the finance department to prepare the necessary
reports. In addition, the budget cycles are important to allow the
management to respond to the problems or the opportunities
disclosed during the regular reviews. At the end of every
budgeting cycle, the accounting can carry out a budget variance
analysis to compare the budget performance to the projected
values. This helps to give the management more detailed
financial information for effective decision-making. Some of
the decisions include the cash flow management in different
quarters of the business season. The budgetary planning
techniques allow for creating a spending plan and ensuring
enough money to meet the organization's needs. Therefore, the

business cycle and budgetary planning techniques are essential
in ensuring proper government management or organization
management.
Value of Budget Cycle Comment by Hy: See comments.
The budget cycle is a continuous process that starts
with revenue estimation. This is the process carried out by the
executive to estimate the levels of revenues collected through
taxes to budget for them (Alesina & Paradisi, 2017). This
process ensures that there is transparency and that the entire
process is understood. Then, the finance director or the budget
director carries out the method of revenue estimation. The
budget cycle also includes the budget call process, where
different recommendations are made on the goals that should be
laid down and achieved within a given budget cycle. This
process aims to ensure that there is equity in the sharing of the
government resources collected in the form of taxes (Mandon &
Cazals, 2019). It also helps in developing a presentation form
that is used in the budgeting process. Finally, the budget
formulation process is meant to reflect on the past goals, the
formulated goals, and those intended to be achieved in the
future and work on reconciling the difference (Aaskoven, 2018).
This is a valuable step because it helps the government continue
focusing on greater interest and allocating more resources.
The process of budget hearings is meant to bring
different parties together to air their views on whether they
think the set goals are suitable for the country's development.
The budget hearings can include the executive and the public
who recommend the necessary changes (Aaskoven, 2018). This
process ensures that the budget is well formulated as per the
current needs of society. However, before implementing a
budget, the legislature must pass it (Priyono & Wagner, 2018).
This is a form of control to ensure the executive does not have
all the powers in the development and the implementation of the
budgetary process. Therefore, the legislature must agree on the
executive's suggestions on how to spend the revenue estimates.
The execution process follows after the legislature adopts the

budget (Priyono & Wagner, 2018). This is followed by some
amendments to meet the set goals and objectives by the end of
the fiscal year.
Value of Budgetary Planning Techniques Comment by Hy: See
comments.
All the budgetary planning techniques are relevant and
important for use by the governments. However, theyThey
enhance the ability to analyze the trends and establish the short-
term and long-term revenues and the government's expenditure
over time (Ivanova et al., 2017). The management identifies the
key business drivers to make the series of business plans that
model the necessary things for the government and how they
would be affected by the variables. Therefore, through the
budgetary planning techniques, the short-term and long-term
revenues generatedgenerated, and the expenditure are
established, including some of the determinants driving them.
The fiscal planning tools go a step further to include financial
modeling. This is the process where they create a summary of
the expenses and the earnings (Kwarteng, 2018). The developed
equations in the financial models are effective in carrying out
financial forecasting. This is important, especially in
understanding the changes necessary to prevent having deficits
or stalling some goals. Forecasting is carried out using different
techniques. They include simple regression, multiple, linear,
and non-linear extrapolation (Kwarteng, 2018). This process
aims to ensure the government can see into the future and
understand how the developed budget will be affected by some
determinants.
From a biblical perspective, it is important that one takes time
to do budgeting to ensure that there are enough resources for all
tasks involved in a project (Luke 14:28-30, ESV). Having a
budget is in line with the biblical requirement of making prior
planning and developing measures to ensure there is proper
performance. The budgetary planning techniques are a form of
driver-based planning. The Bible says, “prepare your work
outside; get everything ready for yourself in the field, and after

that build your house” (Proverbs 24:27, ESV). This process
helps the government understand the shortcomings in its
spending and the areas that can be enhanced to increase revenue
collection.
References
Aaskoven, L. (2018). Polity age and political budget cycles:
Evidence from a Danish municipal reform. European Journal of
Political Economy, 52, 75-
84. https://www.sciencedirect.com/science/article/abs/pii/S0176
268016302403
Afful-Dadzie, A., Afful-Dadzie, E., Awudu, I., &Banuro, J. K.
(2017). Power generation capacity planning under budget
constraints in developing countries. Applied energy, 188, 71-
82. https://www.sciencedirect.com/science/article/abs/pii/S0306
261916317214
Alesina, A., &Paradisi, M. (2017). Political budget cycles:
Evidence from Italian cities. Economics & Politics, 29(2), 157-
177. https://onlinelibrary.wiley.com/doi/abs/10.1111/ecpo.1209
1
Ivanova, O. B., Bogoslavtseva, L. V., Karepina, O. I.,
&Kostoglodova, E. D. (2017). Providing the budget
transparency and state projects efficiency monitoring in
Russia. https://www.um.edu.mt/library/oar/handle/123456789/2
8648
Kwarteng, A. (2018). The impact of budgetary planning on
resource allocation: evidence from a developing
country. African Journal of Economic and Management
Studies. https://www.emerald.com/insight/content/doi/10.1108/
AJEMS-03-2017-0056/full/html
Mandon, P., &Cazals, A. (2019). Political budget cycles:
Manipulation by leaders versus manipulation by researchers?
Evidence from a meta‐ regression analysis. Journal of Economic
Surveys, 33(1), 274-
308. https://onlinelibrary.wiley.com/doi/abs/10.1111/joes.12263

Priyono, S., & Wagner, N. (2018). Political Budget Cycles At
Subnational Level: Evidence From The Indonesian
Simultaneous Regional Election In 2015. JurnalPerencanaan
Pembangunan: The Indonesian Journal of Development
Planning, 2(3), 203-
218. https://journal.bappenas.go.id/index.php/jpp/article/view/3
8
Thread:
Elle White PADM702-Discussion Board-1
Post:
RE: Elle White PADM702-Discussion Board-1
Author:
Angel Cuffie
Posted Date:
May 23, 2021 11:13 PM
Status:
Published Comment by Hy: See comments.
Ellie, I enjoyed reading your post on the government
and the budget process. The government is responsible for
collecting the resources through taxes and adequately allocating
them (Srithongrung et al., 2021). However, the budgeting
process allows the taxpayers and the legislators to scrutinize the
uses of the resources raised. Therefore, the government has a
role in ensuring the taxpayers' money is well allocated
according to the population's needs. The bible supports the fact
that one has tomust give an account of their actions. "SoSo,
then each of us will give an account of himself to God"
(Romans 14:12, ESV). In the same way, the government must be
scrutinized for its operations through the budget. Comment by
Hy: The instructions clearly stated; Do not use personal
pronouns in the thread or replies. The discussion is a formal
communication, not an informal conversation. You did not
follow that instruction.

The negative externalities result in costs on the third
parties. Therefore, the government must intervene and control
such situations (Chen et al., 2018). The government has a r ole
of a mediator to ensure the producers and the buyers are
restricted in their operations. Therefore, through the taxation of
goods, the government regulates the spillover costs (Kubickova,
2019). This increases the cost of production of particular goods
and hence controls their distribution in the market. This is the
process of internalizing the externality.
The governments work to ensure the positive
externalities continue to spill to the third parties. It is involved
in any externality because it ensures the social costs control the
social costs and the private costs (Chen et al., 2018). Through
subsidies, the firm reduces the price of a good and encourages
more consumption. This is because the subsidies reduce the
producers' costs and hence shift the supply curve to the right to
offer goods that are beneficial to society (Bai et al., 2019). The
benefits are to both the consumer and the producer.
References
Bai, Y., Song, S., Jiao, J., & Yang, R. (2019). The impacts of
government R&D subsidies on green innovation: Evidence from
Chinese energy-intensive firms. Journal of cleaner
production, 233, 819-
829.https://www.sciencedirect.com/science/article/abs/pii/S095
9652619320281
Chen, Y. C., Hung, M., & Wang, Y. (2018). The effect of
mandatory CSR disclosure on firm profitability and social
externalities: Evidence from China. Journal of Accounting and
Economics, 65(1), 169-
190.https://www.sciencedirect.com/science/article/pii/S0165410
117300757
Kubickova, M. (2019). The impact of government policies on
destination competitiveness in developing economies. Current
Issues in Tourism, 22(6), 619-
642.https://www.tandfonline.com/doi/abs/10.1080/13683500.20
17.1296416

Srithongrung, A., Yusuf, J. E. W., &Kriz, K. A. (2021).
Systematic public capital manageme nt and budgeting process.
In Research Anthology on Preparing School Administrators to
Lead Quality Education Programs (pp. 598-619). IGI
Global.https://www.igi-global.com/chapter/a-systematic-public-
capital-management-and-budgeting-process/260441
ReplyQuoteMark as Read
Thread:
Rob Snyder - Government and Budget Process
Post:
RE: Rob Snyder - Government and Budget Process
Author:
Angel Cuffie
Posted Date:
May 23, 2021 11:15 PM
Status:
Published Comment by Hy: See comments.
James, I enjoyed reading your post on government budgeting.
The role of government in budgeting indeed is to contribute to
economic development. This is because the government
mobilizes enough resources to be invested in the public sector
(Warren & Jack, 2018). The budget allows the government to
raise savings and to invest in the economy. Increased
government spending helps to create a multiplier effect. This is
because, through the budget, the government increases the
economy's performance, leading to better living conditions for
the population. This increases the aggregate demand. In the
bible, the multiplier effect is seen in terms of an increase in
life. "But the word of the Lord continued to grow and to be
multiplied" (Acts 12:24, ESV). This means that the same way
the word of God causes an increase in spiritual growth, the
same way the government spending increases the benefits to the
citizens. Comment by Hy: The instructions clearly stated; Do
not use personal pronouns in the thread or replies. The

discussion is a formal communica tion, not an informal
conversation. You did not follow that instruction.
The government is supposed to protect the interest of
all parties. This means that the policy-making processes should
consider the benefits and costs to every party (Mi& Coffman,
2019). The producer and consumer are supposed to be protected
from the negative effects. Therefore, the government with tax
policies can help control the negative costs passed to the
consumers (Osipov et al., 2017). They can also increase the
consumption of goods in the economy.
There are no perfect free-market economies or
completely regulated ones. It is the government's responsibility
to ensure there is a balance between the free markets and the
regulations put in place (Sun et al., 2020). The regulations are
necessary to protect the people and the environment. However,
the public interest must be protected and businesses allowed to
flourish. Therefore, the public interest must be balanced with
business needs (Elmagrhi et al., 2019). This will enhance the
growth of the free economy.
References
Elmagrhi, M. H., Ntim, C. G., Elamer, A. A., & Zhang, Q.
(2019). A study of environmental policies and regulations,
governance structures, and environmental performance: The role
of female directors. Business Strategy and the
Environment, 28(1), 206-
220.https://onlinelibrary.wiley.com/doi/abs/10.1002/bse.2250
Mi, Z., & Coffman, D. M. (2019). The sharing economy
promotes sustainable societies. Nature communications, 10(1),
1-3.https://www.nature.com/articles/s41467-019-09260-4
Osipov, V. S., Skryl, T. V., Blinova, E. A., Kosov, M. E.,
Zeldner, A. G., & Alekseev, A. N. (2017). Institutional analysis
of public administration system. International Journal of
Applied Business and Economic Research, 15(15), 193-

203.https://www.researchgate.net/profile/Vladimir-Osipov-
2/publication/319253025_Institutional_Analysis_of_Public_Ad
ministration_System/links/599dc78aaca272dff12fd73d/Institutio
nal-Analysis-of-Public-Administration-System.pdf
Sun, L., Zhang, T., Liu, S., Wang, K., Rogers, T., Yao, L., &
Zhao, P. (2020). Reducing Energy Consumption and Pollution
in the Urban Transportation Sector: A Review of Policies and
Regulations in Beijing. Journal of Cleaner Production,
125339.https://www.sciencedirect.com/science/article/abs/pii/S
0959652620353841
Warren, L., & Jack, L. (2018). The capital budgeting process
and the energy trilemma-A strategic conduct analysis. The
British Accounting Review, 50(5), 481-
496.https://www.sciencedirect.com/science/article/abs/pi i/S089
0838918300374
Research Paper: Simple Time Series Analysis Assignment Guide
ASSIGNMENT for Week
8:***************************************************
**************************
PLEASE NOTE THE CHANGE IN THE PATTERN FOR THE
SUBMISSION TIMES
The assignment isdue by 11:59 p.m. (ET)on Friday, July 9 -
Classes End.
Failure to submit your worksheet with your assignment for
Week 8, Research Paper Simple Time Series Analysis will result
in reduction of points.
If I do not receive your assignment for Week 8, Research Paper
Simple Time Series Analysis by that date and time, you will
receive a zero for the assignment because I will be grading them
on Saturday morning and submitting grade shortly thereafter.

Extensions are not possible after the due date.
Also, any other projects that have not been submitted by
Wednesday, May 12 will receive a zero for the assignment.
*****************************************************
*************************
Research Paper: Simple Time Series Analysis Assignment
Another way to analyze fiscal data over time is viaTime Series
Analysis.
Time series analysis enables public administrators and policy
analysts to examine values of a variable over equally spaced
intervals of time (e.g., income figures monthly or yearly).
Using times series analyses, administrators and analysts can
discern patterns in the revenues and expenditures that then
enable them to forecast revenues and expenditures based on
historical and existing patterns.
A time series plot allows an analyst to look for (1) outliers and
sudden shifts in data patterns, (2) unusual observations or
shifts, and (3) long-term increase or decrease in the data values.
A trend plot also will show whether the data pattern is linear, or
nonlinear, as the time series plot. Then, the question to be
asked is, why?
For this Module Assignment, students will compute and
interpret a Simple Time Series Analysis called Exponential
Smoothing and write a four-page report stating their findings,
including chart(s). (The paper format should consist of (1) a
couple of pages describing time series analysis and how it can
be used to analyze budgets, (2) present the charts, and (3)
analyze the charts based on the information provided below.
See the end of this assignment, How to Interpret the key results
for Time Series Plot.)
I. Getting Started:
· To use the Exponential Smoothing feature in Excel, the Data
Analysis ToolPak must be activated.

· To see if Data Analysis ToolPak has been activated:
1) Look at the top middle of the excel screen and select Data.
2) Look at the top right of the Excel screen and find Data
Analysis.
If you see this, you do have the Data Analysis ToolPak
activated. Please proceed to the next section: II. Calculating a
Simple Time Series Analysis (Exponential Smoothing)
If you do not see this: Install the Data Analysis ToolPak by
following the instructions outlined below.
Step 1: Click on File and select Options
Step 2: Select Add-ins from the left sidebar.
Step 3: Under Add-Ins select Excel Add-Ins under the Manage
options and click on Go…
Step 4: Now from the Add-ins window select Analysis ToolPak
and click on OK to enable “Data Analysis.”
Now you should see “Data Analysis” under the “DATA” tab in
Excel.
If you have any difficulties, contact me immediately by email or
phone. I will walk you through the process.
II. Calculating a Simple Time Series Analysis (Exponential
Smoothing):
Step 1:
Open and save the Income Data located in the Assignment
Resource Income Data Worksheet. This can be found in the
Assignment Instructions folder.

Select Data column (e.g., Median Income)
Follow the instructions below using the Median Income data
Step 2: Click on the Data tab and Data Analysis.
Step 3: Select the Exponential Smoothing option.
Step 4: For the Input Range, specify the available data points.
The data range in this example is B1:B11.
Our data range is B2:B45.
Step 5:Set the Damping Factor to 0.3. This shows for recent
values (recent years revenue values) has given a weight of 70%
and for relatively old values has a weight of 30%. (The more
recent the data, the more important it is to the trend.)
Step 6: Since the column heading was selected in the Input
Range, select the checkbox Labels.
Step 7: Now select the range where to display the output range.
Select the next empty column, i.e., C2.
Step 8: Now, select Chart Output.
Step 9: Click on Ok to get the results. The chart will look like
this:
Do not panic!
Place cursor on the chart and click You will see a round white
dot, just below the term Data Point and drag down until the

chart look like this:
Wala!
Now, select Design at the top middle of the excel screen, then
select Add Chart Element
Select Chart Title >Above Chart> type in Median Household
Income
Then the chart looks like this:
To Change Vertical Axis Values -- Change Value to Median
Household Income
To Change Horizontal Axis Values -- Change Data Point to
Years
To change Data Point to Years:
Select the Chart that you have created and navigate to the Axis
you want to change.
Right-click the axis you want to change (Horizontal Axis) and
navigate to Select Data and the Select Data Source window will
pop up,
In the Horizontal (Category) Axis Label box, select Edit and
place cursor in Axis label range, navigate to data sheet and
click and drag A3 to A45
click OK
Then the chart looks like this:
Chart 1
How to Interpret the key results for Time Series Plot
II. Interpreting the Key Results for Time Series Plot
Step 1: Look for Outliers and Sudden Shifts:
Use knowledge to determine whether unusual observations or

shifts indicate errors or a real change in the process.
· Outliers
· Look for unusual observations, also called outliers. Outliers
can have a disproportionate effect on time series models and
produce misleading results. Try to identify the cause of any
outliers and correct any data-entry errors or measurement
errors. Consider removing data values that are associated with
abnormal, one-time events, which are also called special causes.
· The following time series plot (Figure 4) shows an outlier that
was caused by a data-entry error. A technician accidentally
entered the value 4 in the worksheet instead of 40.
Figure 4
· Sudden Shifts
· Look for sudden shifts in the series or sudden changes to
trends. Try to identify the cause of such changes.
· For example, the following time series plot (Figure 5) shows a
drastic shift in the cost of a process after 15 months. You
should investigate the reason for the shift.
Figure 5
Step 3: Look for Trends.
· A trend is a long-term increase or decrease in the data values.
A trend can be linear, or it can exhibit some curvature. If your
data exhibits a trend, you can use a time series analysis to
model the data and generate forecasts. For more information on
which analysis to use, go to Website: Which Time Series
Analysis Should I Use?
· The following time series plot shows a clear upward trend.
There may also be a slight curve in the data because the
increase in the data values seems to accelerate over time.
Source: 1

Source: https://support.minitab.com 1
Figure 6
Once the plot is completed, write a four-page report, including
chart(s), interpreting the findings. The format should consist of
(1) a couple of pages describing time series analysis and how it
can be used to analyze budgets, (2) present the table, and (3)
analyze the table based on the information provided in section
How to Interpret the key results for Time Series Plot.
How to analyze TSA chart
Assigned readings are not going to help you analyze primary
data. You must learn to do that yourself by researching how to
analyze data. The author(s) have not seen your data, so they
cannot help with the interpretation.
Your analysis should address the following measures:
· Describe the trend that exist in your data.
What does it tell you about median income growth over the
years?
The chart shows that there is a leveling of median household
income beginning at point 35. (Normally, a chart will have data
point, not years.) Look at the lower axis on the table below.
Now, look at your data as see that the 35th point was 2011 and
the 43rd point was 2019. What plausibly could have happened

between 2011 and 2019 that would have dampened growth in
median household income?
· Are there any outliers and/or sudden shifts? (hint, none exists)
· Are there any seasonal patterns or cyclic movements (hint,
none exists)?
· Make sure that you support research with scholarly and/or
biblical references in APA format.
*****************************************************
*************************
To create a preliminary visual forecast
1. Select the data that contains timeline series and values.
2. Go to Data > Forecast Sheet
3. Click the Create
Your actual data will be moved into a new sheet with the
addition of a few columns, and the chart of your selection that
matches what you have seen in the preview will be placed on
this page.
You will need to expand your research beyond text authors’
comments, which normally are not specific enough to provide
sufficient information to help you determine the significance
and implications of the conclusions.
Make sure that you support research with scholarly and/or
biblical references in APA format.
The assignment isdue by 11:59 p.m. (ET)on Friday, July 9 -
Classes End
Exponential Smoothing
Actual 40107.754010695186 41836.106346483713
43391.379310344826 43054.929577464791
42635.982008995503 44462.227074235809 45360
43923.474470734749 42773.302646720367

43483.025027203483 43758.239508700099
45451.724137931036 45325.305944055945
43891.817466561763 43163.146551724145
43047.865853658543 42747.076023391812
44074.438202247191 44898.430899215455
46488.174273858924 47071.1869266055
47432.93694690265 48278.844114528103
47636.590909090904 46268.600682593853
45888.445078459343 45665.498839907188
46175.193094048162 47621.739130434777
48314.520311149528 49308.692893401014
51100.438047559459 52387.576624438087
52300.711743772241 51160.846153846149
50563.342165026494 50518.955942243607
50343.222782984856 50898.814091384724
51277.659574468082 51965.172413793109
50112.096774193546 49777
Data Point
Value
Exponential Smoothing
Actual 40107.754010695186 41836.106346483713
43391.379310344826 43054.929577464791
42635.982008995503 44462.227074235809 45360
43923.474470734749 42773.302646720367
43483.025027203483 43758.239508700099
45451.724137931036 45325.305944055945
43891.817466561763 43163.146551724145
43047.865853658543 42747.076023391812
44074.438202247191 44898.430899215455
46488.174273858924 47071.1869266055
47432.93694690265 48278.844114528103
47636.590909090904 46268.600682593853
45888.445078459343 45665.498839907188
46175.193094048162 47621.739130434777
48314.520311149528 49308.692893401014
51100.438047559459 52387.576624438087

52300.711743772241 51160.846153846149
50563.342165026494 50518.955942243607
50343.222782984856 50898.814091384724
51277.659574468082 51965.172413793109
50112.096774193546 49777 Forecast #N/A
40107.754010695186 41317.600645747152
42769.245710965522 42969.224417515004
42735.954731551348 43944.345371430471
44935.303611429139 44227.023212943066
43209.418816587175 43400.943164018587
43651.050605295641 44911.52207814042
45201.170784281283 44284.623461877614
43499.589624770182 43183.382984992029
42877.968111871873 43715.497175134595
44543.550781991195 45904.787226298606
46721.267016513426 47219.435967785881
47961.021670505434 47733.920137515262
46708.196519070276 46134.370510642621
45806.160341127819 46064.483268172058
47154.562371755965 47966.532929331457
48906.044904180148 50442.120104545662 518
03.939668470353 52151.680121181678
51458.096344046804 50831.768418732579
50612.799685190301 50424.09585364649
50756.39862006325 51121.281288146623
51712.005076099158 50592.069264765225
Data Point
Value
Median Household Income
Actual 40107.754010695186 41836.106346483713
43391.379310344826 43054.929577464791
42635.982008995503 44462.227074235809 45360
43923.474470734749 42773.302646720367
43483.025027203483 43758.239508700099
45451.724137931036 45325.305944055945
43891.817466561763 43163.146551724145

43047.865853658543 42747.076023391812
44074.438202247191 44898.430899215455
46488.174273858924 47071.1869266055
47432.93694690265 48278.844114528103
47636.590909090904 46268.600682593853
45888.445078459343 45665.498839907188
46175.193094048162 47621.739130434777
48314.520311149528 49308.692893401014
51100.438047559459 52387.576624438087
52300.711743772241 51160.846153846149
50563.342165026494 50518.955942243607
50343.222782984856 50898.814091384724
51277.659574468082 51965.172413793109
50112.096774193546 49777 Forecast #N/A
40107.754010695186 41317.600645747152
42769.245710965522 42969.224417515004
42735.954731551348 43944.345371430471
44935.303611429139 44227.023212943066
43209.418816587175 43400.943164018587
43651.050605295641 44911.52207814042
45201.170784281283 44284.623461877614
43499.589624770182 43183.382984992029
42877.968111871873 43715.497175134595
44543.550781991195 45904.787226298606
46721.267016513426 47219.435967785881
47961.021670505434 47733.920137515262
46708.196519070276 46134.370510642621
45806.160341127819 46064.483268172058
47154.562371755965 47966.532929331457
48906.044904180148 50442.120104545662
51803.939668470353 52151.680121181678
51458.096344046804 50831.768418732579
50612.799685190301 50424.09585364649
50756.39862006325 51121.281288146623
51712.005076099158 50592.069264765225
Data Point

Value
Median income 40107.754010695186
41836.106346483713 43391.379310344826
43054.929577464791 42635.982008995503
44462.227074235809 45360 43923.474470734749
42773.302646720367 43483.025027203483
43758.239508700099 45451.724137931036
45325.305944055945 43891.817466561763
43163.146551724145 43047.865853658543
42747.076023391812 44074.438202247191
44898.430899215455 46488.174273858924
47071.1869266055 47432.93694690265
48278.844114528103 47636.590909090904
46268.600682593853 45888.445078459343
45665.498839907188 46175.193094048162
47621.739130434777 48314.520311149528
49308.692893401014 51100.438047559459
52387.576624438087 52300.711743772241
51160.846153846149 50563.342165026494
50518.955942243607 50343.222782984856
50898.814091384724 51277.659574468082
51965.172413793109 50112.096774193546 49777
Forecast(Median income ) 1977 1978 1979 1980 1981
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047
49777 49720.639701859611 49507.686634679601
50483.403070335808 51284.366658803126
52796.510361285938 54083.681180313855
53905.402268104677 53797.007433974111
53748.78471955358 53284.419691113464
53756.266034030348 53649.353033632957
53549.131185113365 53336.509789510877

53280.011244515539 53067.05817733553
54042.774612991736 54843.738201459048
56355.881903941867 57643.052722969784
57464.773810760598 57356.37897663004
57308.156262209508 56843.791233769392
57315.637576686277 57208.724576288885
57108.502727769293 56895.881332166806 Lower
Confidence Bound(Median income ) 1977 1978 1979 1980
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046
2047 49777 47609.007804680667
46665.363427003176 47061.904462669743
47367.409586884096 48439.159092698384
49325.684357694634 48777.183017739677
48322.811991434748 47948.518184992703
47174.798591218881 47351.583450319587
46962.009178905726 46590.014473772346
46115.278549051262 45748.619793557838
45291.774614760405 46030.51050234 8916
46600.80843066339 47888.084759515652
48955.735708187618 48562.88831201593
48244.52609428815 47990.625560175475
47324.593754335889 47598.534166989564
47297.250348496906 47005.988305568892
46605.471406392942 Upper Confidence Bound(Median
income ) 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041
2042 2043 2044 2045 2046 2047 49777

51832.271599038555 52350.009842356027
53904.901678001872 55201.323730722157
57153.861629873492 58841.678002933077
59033.621518469678 59271.202876513475
59549.051254114456 59394.040791008047
60160.948617741109 60336.696888360188
60508.247896454384 60557.741029970493
60811.40269547324 60842.341739910655
62055.038723634556 63086.667972254705
64823.679048368082 66330.369737751957
66366.659309505267 66468.231858971936
66625.686964243534 66362.988713202896
67032.740986382996 67120.198804080865
67211.017149969688 67186.291257940669
Microsoft Excel
Worksheet
Sheet1Household Income for KentuckyYearMedian income
1977$40,1081978$41,8361979$43,3911980$43,0551981$42,636
1982$44,4621983$45,3601984$43,9231985$42,7731986$43,483
1987$43,7581988$45,4521989$45,3251990$43,8921991$43,163
1992$43,0481993$42,7471994$44,0741995$44,8981996$46,488
1997$47,0711998$47,4331999$48,2792000$47,6372001$46,269
2002$45,8882003$45,6652004$46,1752005$47,6222006$48,315
2007$49,3092008$51,1002009$52,3882010$52,3012011$51,161
2012$50,5632013$50,5192014$50,3432015$50,8992016$51,278
2017$51,9652018$50,1122019$49,777
$0$10,000$20,000$30,000$40,000$50,000$60,00019771978197
91980198119821983198419851986198719881989199019911992
19931994199519961997199819992000200120022003200420052
00620072008200920102011201220132014201520162017201820
19Meddan Household IncomeYearsMedian Household
IncomeActualForecast

Sheet1Household Income for KentuckyYearMedian income
1977$40,1081978$41,8361979$43,3911980$43,0551981$42,636
1982$44,4621983$45,3601984$43,9231985$42,7731986$43,483
1987$43,7581988$45,4521989$45,3251990$43,8921991$43,163
1992$43,0481993$42,7471994$44,0741995$44,8981996$46,488
1997$47,0711998$47,4331999$48,2792000$47,6372001$46,269
2002$45,8882003$45,6652004$46,1752005$47,6222006$48,315
2007$49,3092008$51,1002009$52,3882010$52,3012011$51,161
2012$50,5632013$50,5192014$50,3432015$50,8992016$51,278
2017$51,9652018$50,1122019$49,777
Video Time Series Analysis
https://www.bing.com/videos/search?q=Video+Time+Series+An
alysis&docid=607993311704974643&mid=E64C2D079CE0A7C
86A50E64C2D079CE0A7C86A50&view=detail&FORM=VIRE

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