Conventional Budgeting Solutions

When the traditional budgeting process proves to be a frustrating and inadequate tool of fiscal management, municipalities turn to other budgeting methodologies. Some of these methodologies promise better control over spending. Others promise a more sophisticated way to link the budget to the organization’s performance and operating results. I have championed attempts to replace traditional budgeting in several municipalities. Those organizations and others like them did achieve some meaningful benefits from using alternative budgeting processes. But such organizations—with and without my presence—eventually revert to the traditional approach. I believe that these alternative processes are better than traditional budgeting in many respects. But better budgeting methodologies cannot overcome inarticulate missions, visions, and goals. Nor can they overcome the deficient decision-making approaches that give rise to and sustain those missions, visions, and goals. A municipality facing financial pressure cannot afford to be consumed by anything short of a comprehensive solution. Since the early 2000s, two distinct approaches to replace the traditional budgeting process have emerged: Zero-Base Budgeting and Performance Budgeting. The latter approach, which emphasizes organizational results and outcomes, gave rise to Priority-Driven Budgeting and a few variants.