Please one page for each question. Question # 1
In both good economic times and in bad, public managers will often need to review their budgets and suggest areas in which their budgets may be reduced. Read the information provided below and propose how you would approach reducing the School of Public Affairs at Enormous State University budget by 5%. Begin with the strategies offered in your text and try to find articles or information on how cutbacks are handled in your city or state.

The data in the following table present revenues and expenditures by categorized type for the School of Public Affairs at Enormous State University. As with most elite programs at state universities, the school has accepted missions of teaching, research, and service to the university, state, and nation. The data include budgeted and actual data for three years and the proposed budget for fiscal 2008–2009. Your task as a budget analyst is to learn as much as possible about the operations of the school and its plans for the budget year just from these data. In particular, you should look for trends, changes in shares and ratios, and the categories that are particularly important in driving the finances of the school. A few notes about the reported data. First, the state appropriates money to the university and then the central administration distributes that money to the various operations on campus. That is the source of the state appropriation number—it has been assigned to the school, so this number for 2008–2009 is an actual. All others are part of the request. Second, the central administration charges the school for the services that it provides (central library, computer networks, etc.). This charge is the assessment number in the table. It is based on school operations during the year so it is an estimate and it counts as a negative component in school revenue. Your answer to this exercise should include both your conclusions from your analysis and a list of questions that your analysis has led you to have for the person who prepared the 2008–2009 budget. Suppose the central administration has asked for each school to reduce its spending by 5 percent. Where would you suggest that the school turn to make that reduction?

Budget Actual Budget Actual Budget Estimated Budget
Student Fees 14,691,883 14,617,508 14,852,883 15,505,988 16,290,202 4,648,218 17,356,000
State Appropriation 5,391,233 5,391,233 5,155,353 5,155,353 5,100,703 5,100,703 5,150,000
Indirect Cost Income 850,000 1,048,415 900,000 943,279 900,000 1,256,485 900,000
Other Revenue 130,622 136,561 97,750 111,031 104,450 121,263 120,000
(Assessments) (7,297,873) (7,079,459) (7,497,632) (7,356,908) (8,072,512) (8,249,461) (8,100,000)
TOTAL REVENUE 13,765,865 14,114,258 13,508,354 14,358,743 14,322,843 12,877,208 15,426,000
UG Financial Aid 28,000 22,500 28,000 29,075 32,000 27,000 36,000
Grad Financial Aid 1,184,510 1,181,212 1,100,510 1,147,754 1,200,442 1,358,033 1,400,000
Total Financial Aid 1,212,510 1,203,712 1,128,510 1,176,829 1,232,442 1,385,033 1,436,000
Compensation 1,1616,746 1,1202,082 1,1674,484 1,0979,134 1,1563,133 1,1253,420 1,204,1159
General Expenses 974,359 732,636 937,150 801,710 949,267 886,242 950,125
Travel 286,400 232,158 254,700 193,637 265,250 231,331 265,755
Capital Outlay 11,667 0 0 0 0 14,231 0
Transfers for
Indirect Cost 286,848 412,080 326,304 1,164,942 439,491 688,102 458,650

EXPENDITURES 14,388,530 13,782,668 14,321,148 14,316,252 14,449,583 14,458,359 15,151,689

Mikesell, John. Fiscal Administration (Page 210). Cengage Textbook. Kindle Edition.


Question # 2
Imagine that you are an Economic Advisor to the President and need to provide a plan for reducing the federal debt. Conflicting goals create a need for compromise and tradeoffs to create a national budget while trying to remain under deficit limits. Follow the steps below to complete the activity, then respond to the questions posed:
• Follow this link to The Committee for a Responsible Federal Budget: Stabilize the Debt Simulation.
• Carefully read the background information and instructions before beginning the simulation. Your goal is to stabilize the U.S. debt at 60% of GDP by 2018.
• When cutting programs, keep in mind that program cuts could seriously affect citizens’ daily lives. While it is easy to quickly reach deficit limits by making extreme cuts or even eliminating entire programs, try to consider the real-life ramifications of such cuts. Make sure to click on each budget area to access more information about it in weighing your decisions.
• You do not need to provide your personal information at the end of the simulation.
After you have completed the online simulation, answer the following: What were the major changes you made to the budget to reach the goal? Why did you choose those changes over others – what were the trade-offs involved? How will the changes you made affect different groups of citizens? Do you think these changes would be politically feasible?