Budgetary analysis means investigating the financial state of the country during the current financial year. The analysts mostly look at the rates of unemployment of the citizens or any crisis facing the country or state that needs funds to tackle (Korey, 2008). The conclusions made from the investigations help to set the next year’s budget, all factors held constant (Masugi & Janiskee, 2011).
Budgetary policies begin with developing a budget. All departments write budget proposals depending on their current financial state, after which they are forwarded to the finance department for review. The finance department then comes up with the expenditure plan and presents it to the governor.
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The governor reviews and evaluates all financial plans in readiness for the main financial plan. The evaluated budget proposal is referred to as the governor’s budget. The governor reads it to the public before submitting it to the California state legislature in January. The governor introduces the budget bill to the assembly bill house and the senate bill house for consideration (Masugi & Janiskee, 2011). The legislative analyst then expands on the budget bill by coming up with projections and also indicates points in which the bill requires revision (Christensen & Gerston, 2013). The budget is now ready for hearing in assembly budget and senate budget committees. These meetings enable them to group their bills by topic and give them to the concerned subcommittees for them to discuss each topic keenly and make certain changes where necessary (Korey, 2008).
The subcommittees make most of the necessary changes, and a chance is given to the public for them to give their opinion about the budget. The public can either support the budget or suggest the deletion of an item from the budget (Korey, 2008). In May, the governor submits an update of his budget according to any current changes in the country such as revenue changes and expenditure. This updated budget is used to come up with the final decisions especially on very important issues like education and health. Immediately the subcommittees complete their hearings; they revise the budget and make corrections where necessary. After revising they submit the budget bills to the assembly and senate houses.
The two houses, which are the assembly and senate then vote to pass their bill and afterwards the houses exchange the bills. If one of the bills is not passed by the other house, the budget conference committee deals with the differences at hand. The budget conference committee then gives a report to the assembly and the senate about the budget bill. The houses then vote and if two- thirds of each house vote for the budget bill it is sent to the governor for verification (Christensen & Gerston, 2013). The governor needs to get the bill by 15th of June. Developing a legislation means various leaders who can make the right decisions with the best interest of the country, gather to evaluate any issues affecting the country to come up with the best solution (Korey, 2008). With the current politic climate, it differs from developing legislation because the leaders are not working together.
The governor has the authority to correct or eliminate some things on the budget bill which will be put into consideration if two-thirds of both houses vote yes. The governor then signs the budget bill after 12 days for it to be effective from the 1st July (Korey, 2008). Budgetary changes can have both positive and negative effects on the community. A state can face a crisis such as Hurricane Katrina whereby a lot of destruction has been made (Christensen & Gerston, 2013). With such a crisis, most of the funds will be allocated to bringing the state back into shape and handling all the problems caused. The state might also have problems like unemployment, multiple debts, lack of food, poor education system, poor roads and poor health facilities. These problems will force those coming up with the budget bill to take measures such as collecting more tax from the citizens. Taxpayers are forced to pay more so that the government can collect more revenue (Masugi & Janiskee, 2011). When the government collects more tax, companies that manufacture consumer products also increase their prices because they have to continue operating despite the large sum of money being taxed by the government (Korey, 2008).
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When the legislature takes such measures, the community suffers a lot especially the poor people. When market prices shoot it becomes a problem for the needy people to have enough food, some even end up having one meal a day. Shelter is also a problem they will face because of rent issues since if everything has gone up landlords also raise the amount of rent for them to cater for their personal needs (Christensen & Gerston, 2013). Increasing fuel prices will cause public vehicles to increase the amount of fare as well. It is a problem to those who travel to their workplaces each and every morning and back home in the evening (Masugi & Janiskee, 2011).
Increasing the tax collected is a problem mainly to those with meager earnings. These makes them have financial problems even more, and most of them do not meet their needs. Education in the community will be affected because more tax is being collected so those with less income will not be able to pay fees for their children (Christensen & Gerston, 2013). Since market prices have gone up the little money available will be used to get the basic needs instead of paying fees. In the future, the state will have problems with unemployment probably because most of the children did not go to school. There will also be a lack of good education or experience because the schools attended were destitute in that they did not have enough facilities to provide quality education (Christensen & Gerston, 2013).
Political instability due to a budget analysis can also be a problem affecting the community. Once a state is in a poor financial state and prices have gone up, the community suffers, this leads to them complaining about poor leadership. The community will want to elect new leaders which cause political problems (Masugi & Janiskee, 2011). When the budget was being analyzed, not all of the leaders agreed on it. Once the community starts complaining about the budget, they use this opportunity to work against those who voted for the budget. This will cause a political instability in the state, and the budget might not be implemented and the community will continue suffering as time is wasted sorting out differences (Korey, 2008).
The budget can have a positive effect to the community if the state is financially stable and has no crisis to deal with. A deficit and cuts funding can be illustrated in a situation where the governments has no funds or the funds available are not enough to sustain the department in question until the following financial year. The little amount of money is known as deficit. So to help with this problem the government decides to cut more on taxes in order to get more funds. As the government cuts more on taxes, companies have to adjust their product prices accordingly in order to replace the money that is being lost through tax (Korey, 2008).
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A surplus and additional funding are whereby the government has extra money. Money is seen as surplus when everything else has been done, and no more funds are needed anywhere. This extra cash can be made by minimizing on how much is spent to save more. The extra cash is then put together and used to take care of any problem at hand (Korey, 2008). I would recommend a government to prioritize the surplus and additional funding because it does not have a lot of negative effects unlike the deficit and cuts funding. Instead of the government letting the community suffer a lot it should consider cutting down on expenditure and also cut off things like unnecessary allowances so that more cash can be saved by having extra. With this type of funding, problems can be solved easily and more efficiently (Christensen & Gerston, 2013).
The political climate in California is not impressive. A lot is going on like prolonged drought, so dairy farmers are struggling to survive; the education system wants to drop the high school exit test and nepotism (Korey, 2008). Such issues pull back the state instead of concentrating on improving where possible. The issues drive the agenda of budgeting because such issues will lead to funds being misused (Christensen & Gerston, 2013).
With the current politic climate, it differs from developing legislation because the leaders are not working together. They have very many differences among them, and this is making most of them concentrating on the issues affecting them personally instead of doing their job to protect the country and its citizens (Christensen & Gerston, 2013).
Once leaders are not in harmony, they will be busy taking each other to court for various issues such as hate speech and stealing of votes during the elections. Their differences make headlines on every newspaper, radio and TV stations (Christensen & Gerston, 2013). All the focus and energy is directed to finding out which leader is the most powerful. They cannot even go to parliament to discuss the country’s problem and solve it appropriately because they have no time for that. Even if they meet to discuss the issue, nothing will be solved because most of the leaders are not in good terms. If one leader gives a suggestion, the other will immediately contradict it just because they have a disagreement; thus, the whole of the parliament house ends up in quarrels (Christensen & Gerston, 2013).
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Leaders should put behind their political differences especially when solving any problem affecting the state and its people because they have taken a solemn vow to do so. Leaders should also make sure that funds are allocated appropriately to avoid extra expenses or misuse of the funds. Funds should not be wasted on political rallies addressing people on personal issues; instead that time and money should be used in funding constructive programs that improve the state’s economy and revenue. With all this in mind a good legislature should be put in place for better leadership, better decision making and better budgets that favor the community at large (Masugi & Janiskee, 2011). Whenever the planning is done right, projects always meet the expected outcome. A budget that caters for the unknown possibilities is also much safer to implement than the one that covers only what is listed or predictable. Budgetary analysis should always be taken seriously and should be done by experienced individuals. A country’s running almost entirely depends on the budgetary allocation made by the financial department. The finance department thus runs the country’s economy.