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Public Budgeting Proposal

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1.0 Public Budgeting Proposal

1.1 Introduction
This paper includes an analysis of the current budgetary process of the San Diego

County, California with a focus on the factors governing its financial environment. The

expenditures of the county depend on various factors including the demographic status, the

economic activities, and the prevalent political events. The county covers an area of 4,208 square

miles and has a population close to 3.3 million people, and has experienced constant growth due

to increased births and immigration. This demographic factor not only increases the population

pressure on public services and infrastructure requires the right consideration while distributing

resources in order to meet the different demands of the population. Moreover, the county’s

economy boast a Gross Regional Product of over $250 billion. Some of the key pillars of

financial health in the county include defense tourism, technology, and international trade.

However, there are pressures such as increasing living expenses, the cost of housing, and so on

that put pressure on the budget.

Besides demographic and economic factors, political changes in recent years play an

essential role in regulating San Diego County’s budgetary policies and decisions. Policy-making

in the County has relevantly shifted the governance of the Board of Supervisors, primarily with

fiscally related responsibilities, towards a progressive reformist perspective with a focus on

social justice and environmental preservation. These political factors determine funding priorities

and policies that have to be weighed against budgetary realities. It is pertinent to note that this

report concludes that to assess the current state of the San Diego County budget and to outline

potential specific directions for strengthening the budget management, it is critical to consider
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the above mentioned factors. If these elements are addressed holistically, the stakeholders in the

county will effectively understand various aspects of budgeting within a dynamic environment.

2.0 Budget observation: Spending and Income Patterns

2.1 Total Expenditure

The total expenditure for the latest fiscal year for San Diego stands at around $7.6 billion

meaning a per capita expenditure of around $2,303 with the current population of over 3.3

million residents for the county. This figure is significantly higher than in the previous FY, when

the total expenditure was approximately $7.2 billion, which marked a year to year increase of

roughly 5.6%. This growth trajectory can be explained by the fact that the county has focused on

developing better public services and responding to societal needs, including affordable housing

and mental health. The total expenditures of 7.9 billion are still somewhat less than those in

California’s other peer counties; however, they have shown a trend of increases throughout the

last few years.

The rise of total expenditure can be explained with reference to general economic

conditions and changes in population. The population density within the county has been steadily

increasing, thus putting pressure on the availability of public services and requiring proper

management of resources in order to address the needs of the increasing population.

Furthermore, factors such as inflation in the general economy have affected the actual size and

purchasing power of spending in the later years. For instance, when nominal spending is adjusted

for inflation using the Consumer Price Index (CPI), one may suggest that although nominal

spending has gone up, the purchasing power relating to these expenditures might not have scaled

the same rate due to soaring costs.

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2.2 Expenditure Distribution

A greater portion the county’s funds is spent on health and human services. Other

important matters such as public safety are just behind at 25% and infrastructure and community

development receives about 15% of the money. The final 15% is made up of a variety of other

things such as overhead expenses and environmental sustainability measures. For instance, there

is a general trend towards increased funding for homelessness services and mental health

programs, which are indicative of the county’s handling of new and emerging social changes and

public health issues. For instance, funding for homelessness alone has risen more than 20% in

the recent past as the county tries to address this vital area.

It can be argued that this distribution is effective in both utilising the strengths and

exposing the weaknesses within the budgetary arrangements. On one hand, these objectives of

focusing on health and human services reflect the traditional concept of community obligation

and concern for societal welfare. The tremendous amount of resources devoted to law

enforcement and criminal justice suggests a commitment to preventing crime and protecting

citizens; however, it also points to where city officials choose to spend their money given

competing demands. Also, while investment in infrastructure is crucial for sustainable and sound

economic development especially given the increasing population in San Diego, there is need to

pay cognizance on more urgent and pressing social service expenditure for the overall welfare of

the community in the long run.

2.2 Real vs. Nominal Growth

In the light of comparing current and past expenditures in nominal as well as real terms,

there is need to take into account inflationary factors on budgets. San Diego County’s

expenditures have risen to about $26 billion, about 5.6% up from the previous fiscal year, but
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when adjusted for the CPI, real growth has been only about 3%. This implies that while money

spending has gone up to some extent, the real purchasing capacity that these expenditures

command has not gone up in the same proportion since inflation tends to erode purchasing power

across different sectors. For instance, if inflation rates were around 2.5% during this period, the

real increase in budgetary capacity would be lower by the same percentage. Presenting

expenditure figures in real per capita terms also helps further in explaining defense expenditure

trends over the years. As nominal per capita expenditure increased from $2,182 in 2022 to

$2,303 in 2023, an approximate of 5.5% increase was recorded; nevertheless, the real per capita

expenditure may be a relatively inflated or actually stagnant depending on the economic status.

2.4 Sources of Change

There are certain factors that have caused changes in the budgetary expenditure of San

Diego County. One of the main reasons for the increase in spending was the need for the health

services due to more individuals suffering from mental health problems and those who are

experiencing homelessness. For instance, mental health programmes received a boost of about 15

percent within two years as local government leaders sought to address dire community needs by

improving service delivery. Moreover, there has been a rise in the spending on public safety as

there have been enhanced funding for local police formations and support for emergency

services across the communities. This involves technology acquisition for police departments as

well as frequent training sessions to enhance the police community relations. Such changes

indicate positive actions by the local government officials who appreciate the role of investing in

public resources in response to the current emergent safety demands as well as other social

concerns.
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2.5 Strengths and Weaknesses

Analyzing the budgetary practice of San Diego County, the following strength and

weaknesses can be identified. One of the key strengths is the evident focus on increasing the

investment in health and human services, which is complemented by the data on the identified

priorities, reflecting the desire to promote the development of social welfare programs in the

community. For example, spending on activities that could help eliminate homelessness in the

city has gone up by nearly 20% in 2022 and 2023, suggesting engagement with social concerns

that affect inhabitants’ well-being.

One notable weakness is that fixed costs in healthcare and public safety are rapidly

escalating, and such escalation hampers efficient resource allocation based on emerging demands

or contingency issues within the county. Additionally, the fact that about 60% of total revenue

comes from property taxes also creates risks in the event of an economic downturn, since the

flow of taxes might be unpredictable because of changes in the market or in property values.

These issues will be fixed for sustainable fiscal policies to be established and developed in a way

that can respond to new conditions and adequately satisfy the needs of the community.

3.0 Budgeting Procedures: San Diego County

3. 1Annual or Biannual Budget

San Diego County’s fiscal is based on an annual budget, and this indicates that the budget

of the county is prepared, scrutinized, and adopted for just one fiscal year only. This approach is

particularly helpful as it enables the county to make adapted and able to make quicker responses

to shifting economic situations and population requirements. Budgeting is perhaps the most

important financial management strategy especially considering the increasing population

demands and emerging social challenges. The budget for the county in the financial year 2023
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was about $7.6 billion which was $407 million above the $7.2 billion of the financial year 2022.

This consistent annual cycle allows for adaptations throughout the year using the most current

data and trends, preventing budgeting from becoming irrelevant.

This cycle can take several months before the actual fiscal year begins to allow for

adequate formulation and review. For example, the formulation phase of the 2023 financial plan

started in early 2022, and during this phase, county departments prepared their budget estimates

based on their perceived needs and priorities. It is also useful for explaining budget priorities and

distribution to various stakeholders such as department heads, community organizations, and the

public.

3.2 Fiscal Year

San Diego County follows a July 1 to June 30 fiscal year. This timing is convenient

because it coincides with many local government entities throughout California and allows for

simultaneous and synchronized fiscal budgeting between different entities. This also enables the

budget processes to correspond with state funding cycles and revenue collection schedules in the

county. Consequently, it implies that revenues – mainly property taxes – are collected during the

fiscal year. For instance, county revenues include leading sources such as property taxes, which

comprise about 60% of total revenue; expenditure must be judiciously planned and timed to

ensure the consistent funding of services throughout the fiscal year. With these measures of

financial cycles, San Diego County can know in advance if there is likely to be a deficit or

surplus in the budget.

3.3 Budget Process Description

The budgeting process in San Diego County involves several key stages: formulation,

review, approval, implementation/execution, audit, and assessment. In the formulation process,

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the heads of respective county departments present their budget estimates in line with the

anticipated needs and importance. For instance, when planning for the fiscal year 2023 budget,

various departments sought more money to cater for increasing expenses in the health sector and

security services. It is the responsibility of the Office of Financial Planning to categorize such

requests, and the Board of Supervisors is then provided an opportunity to assess such requests.

This is further followed by a review process as well as public hearings that enable

communities to give their opinions on the proposed allocations. For instance, in 2022, numerous

public hearings were conducted in relation to substantial increases in funding for homelessness

services which increased by more than 20 percent due to increased need. The budget is then

approved by the Board of Supervisors and subsequently implemented throughout the fiscal year.

Execution entails overseeing spending against the set budgets to check compliance or otherwise

to financial rules and regulations. Annual reviews of financial performance and compliance with

budgetary standards occur at the end of each fiscal year.

3.4 The issues highlighted in the last budget:

Some challenges that have been observed in San Diego County’s budgeting process

include the increasing cost of social services in light of growing mental health issues and the

homeless population within the society. The county’s proposed budget for health and human

services in the fiscal year 2023 was about one billion dollars, which demonstrates a significant

focus on these significant matters. Furthermore, residents are facing issues regarding affordable

housing since the prices of housing units available in the market have significantly increased.

3.5 Presidential vs. Parliamentary System

San Diego County follows a clear separation of powers where the head of the executive

branch is the County Executive Officer while the law-making body is the Board of Supervisors.
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The key responsibility of the CEO in formulating the budget proposal is the assessment of the

budget proposals submitted by the individual departments against the strategic plans laid down

by the Board of Supervisors. For example, when developing the FY 2023 budget proposal, the

CEO stressed the need to seek additional funds for police and other security services due to the

increasing crime level. While the final decision on the budget lies with the Board of Supervisors,

the executive branch is also held accountable through public hearings and voting. More recently,

issues of conflict have arose between executive proposals, such as requesting budgets for liberal

legislation on law enforcement, while legislative agendas emphasize spending on social services.

This balance allows for the check of self-interest in expenditure by interest groups while at the

same time ensuring that the community has a say in the budgeting process of county’s resources.

3.6 Public Participation Forms

It is important to note that San Diego County is proactive in seeking public involvement

throughout the budgeting process on the grounds of openness. The most direct means by which

the public can participate is at public hearings where people can speak and make their

contributions regarding proposed budgets or service preferences prior to the approval by the

Board of Supervisors. More than one thousand residents attended these hearings to discuss some

changes in the proposed budgets for 2022. Moreover, San Diego County has embraced the social

media in the dissemination of its budget information and engaging residents in giving their

views. The county is also actively engaged in social media, where accounts of its departments

may occasionally include links to pie charts and other graphics that enable citizens to engage in

giving feedback in the form of a survey or commenting section.

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4. 0 Budget Format and Information Management: San

Diego County
Existing Budget Format

The budgeting process in San Diego County currently applies line-item budgeting where

specific appropriations are provided for in the budget for different departments and programs.

This format can facilitate accountability and efficiency because it is easy to explain how the

money is split between various categories like health, safety, and construction. As an illustration,

whereas the health and human services got about one billion dollars within the fiscal year 2023

budget, public safety got approximately $1.9 billion. It means that the gross details achieve the

objective of letting the various stakeholders know areas where they have invested their

taxpayers’ money and this assists the identification of areas where expenditures are going

beyond the set budgets.

Nevertheless, the use of line-item format is disadvantageous in the sense that it restricts

the choices of departments in terms of how they could control their expenditures. It might be

challenging for the departments to transfer funds from one line item to another to meet new

needs without approval procedures. Other disadvantages include a slow decision-making process

and lack of flexibility to respond to new challenges.

Possible Enhancements for Structures

However, to settle for another budget format like the program-based or the performance-

based budgeting, several alterations would be required. First, the county would require training

sessions for both the budget staff and the department heads concerning the new system and the

strategies that would have to be adopted. Also, there would be a need to organize data acquisition

systems that would ensure proper tracking of performance indicators. For instance, if the county
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were to use performance based budgeting, then it would involve coming up with measurable

performance targets associated with service delivery.

The implications associated with such a change could be far-reaching. The program-

based budget could help to focus the expenditures on achieving the strategic goals, rather than

just being a tool to divide the funding among sectors and programs. For instance, if the county

had identified homelessness as an area of focus, the performance-based funding would enable

efficient transfer of resources towards efficient programs while releasing resources from less

efficient ones.

Capacity for Change

San Diego County has the ability to switch to a different budget format because it already

has the necessary infrastructure for financial management and shows the desire to develop it

further. The Office of Financial Planning has professionals qualified enough to handle the

transition to the new budgeting methods in case it is required. Second, the county has previously

participated in planning for strategic change, thus suggesting that it is open to seeking better

ways of doing things.

Nevertheless, the proposal to shift to another form of budget would entail constant

support from the Board of Supervisors, and cooperation with numerous stakeholders, including

department heads and community groups. Moreover, sufficient funding would be required to

facilitate training and upgrade of the systems to support effective implementation.

The main heads forming the budget.

Some of the major funds that make up the County’s budget include: general fund- dealing

with various operations of the county; special revenue funds- supporting specific programs;
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capital project funds- mainly dealing with infrastructure development; and enterprise funds- they

are funded and function like businesses e.g. water service. The General Fund expenditure was

$2,015 billion, which contributed to about 98 percent of the total spending in fiscal year 2023

due its critical role in providing fundamental public services including public safety and health.

Special revenue funds are particularly useful for supporting specific programs and

projects; for instance, San Diego County used approximately $200 million from special revenue

to enhance mental health care in 2023. These funds are important for making major long-term

infrastructure commitments; in 2023, these funds were estimated to be about $300 million for

projects such as roads and facilities. Understanding these fund structures can help in assessing

how resources are distributed between different priorities in the county.

Strategic Direction

San Diego County presents a clear strategic management direction and focus in ensuring

that social issues like homelessness and mental health are well addressed. These areas are

notable in the recent budgets set aside by the Board of Supervisors a show that they are in

tandem with the needs of the community and adequate resources have been allocated

accordingly. For example, funding for homelessness services rose by approximately 25% from

fiscal year 2022 to 2023 due to the broader homelessness plan of lowering the homelessness

rates across the region. Furthermore, the strategic planning and implementation across the county

have involved understanding the feelings of residents on the allocation of the budget. This means

that the government of the county understands the expectations of the people it serves and acts in

the best interest of the people due to mutual trust.

Control of Appropriations
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Funds in San Diego County are budgeted narrowly within the specific line-item budget

system. This means that each department has to strictly follow the approved appropriations

without permission for any reallocation or transfer of funds. Such top-down control enhances

responsibility but may lead to rigidity in addressing emergent issues or changing needs and

goals. Although line-item details may help in presenting information about expenditures, this

approach may limit departments in their adjustments of costs to reflect the actual circumstances

or emergencies. For example, if the public safety department for some reason receives many

requests for its services due to storms, epidemics, or similar situations, it can shift funds to other

non-structural expenses in the same department or in others within the organization. However,

this may take hours and days to do it because of the numerous tiers of approval that are usually

in place.

Responsibility for Revenue Forecasting

In the case of San Diego County, the task of revenue forecasting lies mainly within the

Office of Financial Planning that utilizes various economic and historical revenue data to foresee

revenues in the future. This office works with other departments to get information about the

expected changes that may affect revenues and incorporate these in the budgets. The revenue

forecasts produced by this office are instrumental in defining budget schedules along with checks

and balances to ensure that costs are within the expected inflows of funds. Budgeting with a

focus on forecasting gives county officials a chance to distribute money wisely without having

issues like budget shortages or budget overestimations that may lead to budget instability.

Future Year Forecasts

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The annual financial reports of San Diego County usually contain some projections for

the following years—usually the next two years beyond the current fiscal year to assess the long-

term budget plan. These forecasts assist in decision making since it enables the official in charge

to forecast any impending variations in revenues or incremental expenditures within a specific

period. For instance, the fiscal year 2023 budget had projections with a moderate GDP growth of

roughly 3% per annum in the next two years given the patterns of economic rebound from the

effects of the pandemic. However, it should be noted that while these forecasts are presented in

budget documents, their application may be indirect depending on how a specific forecast is

integrated into the ongoing management decision-making processes and whether actual control

data are used to adjust the forecast used.

Communication Tool Effectiveness

The budget document is a comprehensive instrument that plays an essential role in

presenting financial plans and priorities to the residents of San Diego County. The document also

contains a breakdown of spending by program areas like health services and public safety, and

notes the significant programs funded within these categories. However, there are indications and

suggestions that could still have been included due to their potential to make the guidelines more

conspicuous, accessible and understandable to lay audiences. It is worth considering breaking

down the language used and including additional illustrations such as charts or infographics to

improve comprehension among the residents who might not have strong finance-related

knowledge. In this case, enhancing organisational communication to(news.Daily) ensure that San

Diego County presents clear and understandable information would be helpful in creating trust

and involving citizens.

Performance Information Integration

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Some performance information is included in San Diego County’s budget in a form of

workload measures; however, more information, especially the outcome measures related

directly to the funding provided in the budget, seems to be missing. For example, there could be

the information on service deliveries, or the number of people touched by Mental Health

Programs but there could be a lack of focus on end results like the enhancement of mental health

wellbeing or the decrease in homelessness amounts resulting from funded programs. Extending

the use of broader measure of performance into the process of budgeting would be useful for

officials to determine not only how money is spent but also whether the spending results in

positive changes for the community.

Evaluation of Program Efficiency

Currently, San Diego County has put measures in place as to how programs shall be

assessed; however, there are issues relating to the coherence and effectiveness of the assessment

across departments. A needs assessment is normally performed on significant projects and

programs, such as those concerning health services; however, they may not apply uniformly to

each of the funded programs. This means that to increase efficiency in the process of program

evaluation, there should be sustained processes of data collection that focus on the measurement

of outputs, which are service delivery indicators, and the evaluation of outcome, which is the

impact assessment.

Comprehensive Analysis

Structural and Institutional Breakdown of San Diego County Budget

In examining San Diego County's budget structure and institutional design, two critical

features emerge for further analysis: Concentration of resources on health and human services
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and the specificity of the line-item budget structure. These features have a significant impact on

the budgeting strategies, results, and general financial viability of the county.

Allocating more spending for Health and Human Services

Health and Human Services receive the largest share of funding, making up about 45

percent of San Diego County’s budget in fiscal year 2023. This allocation is in line with the

goals of the county in dealing with emergent issues in the society like poverty, unemployment,

mental illness, and prevalent diseases. The historical spending demonstrates that these services

have continually received incremental funding; for example, spending for homelessness

initiatives was nearly a quarter higher in fiscal year 2023 at over $300 million. The increase in

such instances can be explained, among other reasons, by the growing need for mental health

care or high levels of unemployment and homelessness due to economic difficulties.

Some of the consequences of such an allocation works against the proportional

allocation. While the allocation suggests a clear priority for social concern and social cause on

the other hand it may potentially limit the availability of resources for other important social

responsibilities like law and order or constructing public facilities. For instance, funding for

health services has gone up, but departments have reported having stale budgets that do not allow

efficient tackling of emergent needs at times. This expenditure structure may affect the overall

balance in the financial situation of the county and may lead to the cut down of other important

sectors such as education or public safety among others in cases where Pharmacy is considered

to be a priority.

The Budgeting Structure

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The budget model used by San Diego County is line-item budget format, which gives

specified appropriations to departments but may limit the flexibility in the use of funds. The

General Fund in fiscal year 2023 sums up to about $2 billion, with itemized lists showing the

assigned line items for different programs. While this format favors transparency and

accountability because expenses will be easily seen, it can prove disadvantageous when it comes

to making adjustments to the specified line items due to new arising emergencies or needs.

The major drawback of a line-item format is that it uses special categories and estimates,

making the allocation system rigid and prone to inefficiencies. For instance, let us consider a

department’s working budget for a given fiscal year. If there is an emergency, such as a natural

disaster or public health crisis, where some costs need to be incurred, moving around funds from

other areas may be time-consuming due to various approvals; this ultimately slows down the

response to the disaster. Also, such a format may not capture the grand strategic vision of the

county because departments might be unable to reallocate resources to meet new challenges.

Switching to the program or performance budgeting may improve flexibility and enable the

organization to make quick decisions on funds distribution and priorities to meet its strategic

objectives.

Conclusion and Recommendations

The current condition of San Diego County on its budgeting shows that the situation is

Lipscomb, more complex and that is why there are some expenditure trends and revenue that

needs to be taken into considerations. Total expenditures of the county was about $7.6 billion in

the year 2023 which was 5.6% higher than it was in the year 2022. One of the major trends of

this budget is the domination of health and human services expenditure, which make up

approximately 45 percent of the total spending. This increase is largely due to the rise in the
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demands for mental health services and care drives for homelessness, where funding for

homelessness alone has increased by nearly 25%. However, this concentration brings into the

question the preparedness and provision of adequate resources for other vital services like those

of public security and social infrastructure that are equally vital to the wellbeing of the county

financially.

There are other issues that make the budgeting process challenging; San Diego County

uses the line-item budget format which is rigid. While this format helps achieve increased

transparency and accountability since it clearly provides for specific appropriations, it inhibits

the ability to transfer funds from one line item to another for responding to emergent

circumstances or priorities. For instance, where a department needs to rearrange its budget to

accommodate for unforeseen expenses because of a calamity or an outbreak, the process involves

a lot of approval procedures and forms that slow down swift reactions. This may make the

delivery of services in the county less efficient and also slow in responding to emerging issues

within the society. Moreover, the study reveals that the county heavily relies on the property tax,

which stands at around 60% of its total revenue; however, fluctuations in property values during

economic crises are unfavorable.

Some of the recommendations for San Diego County include that the county should

incorporate a performance-based budgeting systems that can evaluate the efficiency of the

budgeting process on one hand and program based need rather than historical spending. Such a

shift would help facilitate more efficient resource deployment that is aligned with organisational

objectives coupled with better ability to respond to the needs of the community. In addition,

communicating with the public effectively to boost their confidence in the budgeting process

hence improving the public’s trust in the process. Through these recommendations of expanding
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the revenue base and strengthening program evaluations, the San Diego County will be in a

better position to manage the presented financial difficulties while aiming at the optimal

distribution of resources within a heavily diverse Californian society.

References

National Association of State Budget Officers. (2021). Budget processes in the states [PDF].

National Association of State Budget Officers.

https://www.nasbo.org/reports-data/budget-processes-in-the-states