Budgeting

School budgeting is the process for securing resources and allocating those resources to provide instructional and noninstructional programs that support student learning. Budgeting is a tool for achieving a school or school district's mission, goals, and objectives. The budget document, a result of the budgeting process, is a policy statement of what is valued.

A public administration model describes budgeting as clusters of decisions: process, revenues, expenditures, balance, and implementation. Decisions about process determine time lines, who the decision makers are, and the level of authority they have. Several theoretical models of budgeting processes occur in the literature. Budgeting models are generally developed/used by the federal level of government first, and then they trickle down for experimentation in the education arena. Budgeting models mostly describe estimating expenditures with little attention paid to revenues. Line item, incremental, and earlier program budgeting models are described as top-down processes with few stakeholders involved in the process. Zero-based budgeting, site-based budgeting, and performance budgeting are more decentralized processes that include many stakeholders with greater authority.

Historically, line item budgeting occurred first around the beginning of the twentieth century. The development of the line item budget was a response to the desire for greater accountability in the handling of governmental funds. The first historical budgeting documents contain only a few line items for revenues and expenditures. The complexity of today's schools, with multiple revenue streams to fund a plethora of educational programs, requires a budget document with hundreds of line items, as the accounting process requires coding for program (instruction or noninstruction), function (direct instruction, school administration, transportation, etc.), and object (salaries, benefits, supplies, contracted services, etc.).

All budget documents end up as line item budgets, largely due to accounting requirements, regardless of the process that was used to develop the budget.

Line item budgeting, as a process, occurs by literally examining each line item and making a decision as to whether last year's budgeted amount should be increased, be decreased, stay the same, or possibly be eliminated. Line item budgeting focuses on the objects of expenditure rather than on larger programmatic concerns. Some scholars of budgeting argue that line item budgeting is easy to do and easily understood and has been the mainstay of public budgeting regardless of the introduction of other processes. However, others argue that it is almost impossible to base programmatic funding decisions by looking at hundreds of individual line items.

Incremental budgeting is much like line item budgeting. The major distinction is that rather than examining each line item, incremental budgeting applies the same percentage increase in an across-the-board manner to each of the budget items. A 5% increase in revenue would translate into an automatic 5% increase for each budget item. While some writers have argued that incremental budgeting is fair because there is uniformity, others have argued that this process does not take into account the real fiscal needs of a budget unit. Educators may be more experienced with decremental budgeting—equal percentage reductions when budget cuts are necessary. Again, while some argue that across-the-board cuts are fair, others argue that such a simplistic budgeting technique does not account for needs or efficiencies that may already be in place.

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