HANDBOOK OF GOVERNMENT BUDGETING: TEACHING SUPPLEMENT

Version 2: November 10, 1999.

I would greatly value receiving your comments, questions, suggestions, and/or criticism on the Handbook and this teaching supplement. Please email me at meyers@umbc.edu, or call at 410-455-2196.

In this supplement, I first describe why I prefer a quasi-experiential approach for government budgeting pedagogy. I then provide links to my budgeting syllabi and many of my course assignments, and explain how I order the Handbook chapters and link them to classroom activities. The supplement concludes with some suggested sources for alternative assignments. (Sorry, students, no test questions!)
 

THE HANDBOOK'S DESIGN, STUDENT CHARACTERISTICS, AND GOVERNMENT BUDGETING PEDAGOGY

That challenge of diversity can also be found in many government budget classes. For example, some students are entry-level and others are mid-career. Some students want to specialize in financial management, others want to specialize in different skills or policy areas, and yet others want to become generalist managers or analysts. And the students work for, or hope to work for, the federal government, state governments, local governments, non-profits, for-profits, and international organizations. When students are relatively heterogeneous on these dimensions (as is the case with my students), budgeting courses must survey more material than otherwise (for example, than in a course filled with students who plan to become local government finance officials).

An additional complication of designing government budgeting courses is how they might connect to other courses the students may have taken, be taking, or will take. Some programs-particularly those oriented towards entry-level, full-time students-have the luxury of a sequence of required courses. Students may receive some training in microeconomics, public finance, macroeconomics, accounting, statistics, policy analysis, management, and/or the political process before they step into a budgeting class, and they may take an entire class in financial management after the budgeting class. In contrast, programs oriented towards mid-career, part-time students may allow more flexibility in course choices and sequencing. In this latter case (which, again, is the situation I face), the budgeting course cannot assume that all students possess particular skills or know about topics closely related to government budgeting.

A final complication of suggesting how budgeting courses could be designed is that the teaching styles of professors naturally differ. My pedagogical approach for the budgeting course is to deemphasize lecturing. I do this in part because much research shows that students learn more through discussions, role-playing, and other "hands-on" methods. Also, because the Handbook provides a sufficient survey for most of the essential facts and concepts I want the students to know, more class time is freed up for such quasi-experiential learning. (Note also that though the in-vogue method of "distance learning" allows students to time shift their lecture reception and test-taking, that approach severely limits opportunities for many types of group learning.)

Most of my course assignments and class activities use what is broadly called the "case approach." Obviously, unlike in the extreme version of this approach, I do not rely solely on cases! Instead, I ask students to begin by carefully reading one or more chapters from the Handbook. Then I ask students to assume roles, and to address a challenge that is typical and important in government budgeting. This allows them to practice applying what they've learned from the readings, and going beyond this, to think critically. As I wrote in the preface, the Handbook is not a cookbook; the case approach allows students to wrestle with the fundamental dilemmas inherent in government budgeting. For many of the assignments, I use web sites to expand the context of cases and to expose students to current policy and management issues.

Because I find that undergraduates need more incentive to read carefully and to do so prior to class coverage, and also benefit from more feedback about their levels of comprehension, I give several announced quizzes. I supplement these with unannounced quizzes if the students show evidence of slacking-that is, silence when I pose questions about the readings. This typically happens around mid-semester. I also use a final for undergraduates, part of which is short answer identification of concepts (can't neglect the importance of jargon in budgeting!). The rest of the final is an essay, on a question the students receive about a week before the final. They can bring their brain to the final, but no notes.
 

MY COURSE DESIGNS

I also maintain a budgeting course home page, which includes links to the course assignments that are web-based. Please feel free to use or modify these assignments. (An exception is the JFK School's "Battle for Business" web case, which is copyright-protected.)

My courses generally follow the order of chapters in the book, but with some modifications. The graduate course requires all the chapters in the book; the undergraduates are expected to read two-thirds of the chapters.

The courses begin with an introduction to budgeting. At the first class, I hand out some budget displays for UMBC's budget. I answer questions about what the details might mean, I lecture about the processes that are used to establish and manage UMBC's budget, and we discuss how the students' lives might be affected by these budgetary decisions.

For the next class, the graduate students then read Section 1, and we discuss whether the U.S. should attempt to emulate New Zealand's approach of financial management, and public management more generally. The undergraduates cover only chapters 1 and 2 of Section 1, and I quiz them on concept knowledge.

The course then covers the financial reporting and credit market constraints faced by state and local governments (chapters 5 and 6). The students review Baltimore's Consolidated Annual Financial Report, and in class I act as the Baltimore finance director and the students roleplay as bond raters, state legislators, and community activists.

For the graduate students, the course then covers bases of accounting and long-lived budgetary commitments (chapters 14 and 28), and we discuss the financing challenges of Social Security, Medicare, and Medicaid.

I then lecture on the mechanics of federal government borrowing and we discuss macroeconomic and business cycle policy issues at both federal and subfederal levels. We debate what should be done about the federal budget surplus (and whether it exists in fact) and the pros and cons of balanced budget rules (chapters 7-9).

The course then briefly covers taxes. I supplement chapter 10 on the economics of taxes with a lecture, and the undergraduates take a quiz. The graduate students do a revenue forecasting assignment, which incorporates the chapter on that topic (12) and another (13) on the politics of taxes. The undergraduates discuss tax revolts and tax reform, though I defer coverage of the details of tax preferences until later in the course.

The course then turns to budget development. The graduate students read chapters 15 and 16, on cost accounting and information systems, and we roleplay a task force on budgeting for the costs of elementary and secondary education. The discussion tends to focus on the ideal and practice of responsibility budgeting. I ask the undergraduates to read this material, but I have to lead them through the material concept by concept. For both graduates and undergraduates, I also lecture on technical and allocative efficiency in the budgetary context, using Superfund and other environmental spending as examples.

Then we turn to incremental budgeting, with a negotiation on a line-item budget for a hypothetical environmental and public health agency, and for which minimal information is given to students. In preparation for this, all students read chapters 17 and 18, on agency budget preparation and on budget examining. (If I had another week for this course, I would add more here on the mechanics of budget preparation and analysis.)

The class then turns to budget enactment, and I supplement chapter 19 with details on how earmarking and similar legislative behavior affect budgetary flexibility in agencies. Graduate students also read about the courts (chapter 20). That is followed by a week on performance-based budgeting (chapters 24 and 25). The exercise is a role-play that covers budgeting for prisons.

The final week on budget development uses a budget hearing in which several groups of students advocate against proposed cuts in entitlement and tax preference spending and other students act as Senators who must approve or deny these requests. Chapters 21 and 22 describe the competitive process at this level, and chapters 11 and 27 discuss the special aspects of budgeting for tax preferences and entitlements. I conclude with a lecture on the limits of current methods of allocative budgeting.

The next week is on capital budgeting (chapter 26). An excellent web-based case on economic development subsidies in North Carolina illustrates the complexities of that form of spending, and makes for an interesting comparison to the capital budgeting process. We also discuss the soft capital issue and recent developments in federal capital budgeting.

The next two weeks cover budget execution (chapter 23), fraud and internal controls, and contracting. (If there is a second edition of the Handbook, I hope to add chapters on the latter two topics; now I use reserve readings.) I show a 60 Minutes video on "the Mississippi Christmas tree," and we discuss the interactions between fraud, program design, and administrative capacity.

Both weeks use the area of substance abuse treatment (SAT) for exercises. The graduate students consider how governments could audit SAT providers. After a brief discussion of the too-sweet-to-forget chocolate-chip cookie milspec case, both graduates and undergraduates discuss the dilemmas of contracting for services.

The course concludes with an integrative experience. In the past, I've used an excellent but now dated simulation on N.Y. State's budget (Paul R. Fisk, et. al., 1990, "Budgeting in the State of Disequilibrium," Rockefeller Institute of Government). I now develop a role-playing exercise that explores a current budgetary issue facing my state (Maryland). This year we will cover a possible increase in the gasoline excise tax and how it could be allocated.
 

SOURCES FOR GOVERNMENT BUDGETING CASES AND EXERCISES

Two case programs provide catalogs on the web: The Harvard University JFK School of Government Case Program and The Electronic Hallway. For interesting articles on teaching methods, see the "Curriculum and Case Notes" series in the Journal of Policy Analysis and Management. Other useful readings include:

Donald A. Schon, 1983. The Reflective Practitioner: How Professionals Think in Action. N.Y.: Basic Books.

C. Roland Christensen, David A. Garvin and Ann Sweet, editors, 1991. Education for Judgment: The Art of Discussion Leadership. Boston: Harvard Business School Press.

Abby J. Hansen, 1987. "Reflections of a Casewriter: Writing Teaching Cases," in C. Roland Christensen with Hansen, Teaching and the Case Method, Boston: Harvard Business School Press.

James M. Banovetz, editor, 1996. Managing Local Government Finance: Cases in Decision Making. Washington, D.C.: International City/County Management Association.

Aman Khan and W. Bartley Hildreth, 1994. Case Studies in Public Budgeting and Financial Management. Dubuque, Iowa: Kendall/Hunt.

Carol W. Lewis and A. Grayson Walker, III, 1984. Casebook in Public Budgeting and Financial Management. Englewood Cliffs, N.J.: Prentice-Hall.

Murray Dropkin and Bill LaTouche, 1998. The Budget Building Book. San Francisco: Jossey-Bass.

Jerry McCaffery, 1987. Budgetmaster, second edition. Self-published.

Edward A. Lehan, 1988. Budgetmaking. N.Y.: St. Martin's Press.

Juliet Carol Powdar, 1996.  The Operating Budget: A Guide for Smaller Governments.  Chicago: Government Finance Officers Association.

Susan L. Riley and Peter W. Colby, 1991. Practical Government Budgeting. Albany: SUNY Press.