PUA 5305
Unit III Essay
Columbia Southern University
Public Finance and Budgeting
PUA 5305
Budgeting and Budgeting Tools
The delivery of public goods is funded by taxpayers. At the federal, state, and local
level, funds are allocated through a budget. The budget determines how public resources will
be used
in the allocation of goods and services.
Governments use a number of budgeting tools to decide funding levels. Some of the
tools used in budgeting is incrementalism, performance, program, and zero based budgeting.
Incremental budgeting is a budgeting process that is based on the notion that a new budget
can
be developed by making marginal changes to the current budget. With incremental
budgeting, the current budget is used as a base to which incremental assumptions are added
or subtracted from the base amounts to determine new budget amounts (Corporate Finance
Institute, 2020). Zero- based budgeting is a method of budgeting in which all expenses are
justified for each budgeting period. The process of zero-based budgeting starts from a "zero
base," and every function within an organization is assessed for its needs and costs. Budgets
are built around what is needed for the upcoming period, regardless of whether each budget is
higher or lower than the previous one (Berry-Johnson, 2021). A performance budget is one
that reflects both the input of resources and the output of services for each unit of an
organization (Hayes, 2020). A program budget is a budget prepared for a particular project or
program. The program budget includes expenses and revenues related to the specific project
(Borad, 2021).
Unit III Essay
Columbia Southern University
Public Finance and Budgeting
PUA 5305
Budgeting and Budgeting Tools
The delivery of public goods is funded by taxpayers. At the federal, state, and local
level, funds are allocated through a budget. The budget determines how public resources will
be used
in the allocation of goods and services.
Governments use a number of budgeting tools to decide funding levels. Some of the
tools used in budgeting is incrementalism, performance, program, and zero based budgeting.
Incremental budgeting is a budgeting process that is based on the notion that a new budget
can
be developed by making marginal changes to the current budget. With incremental
budgeting, the current budget is used as a base to which incremental assumptions are added
or subtracted from the base amounts to determine new budget amounts (Corporate Finance
Institute, 2020). Zero- based budgeting is a method of budgeting in which all expenses are
justified for each budgeting period. The process of zero-based budgeting starts from a "zero
base," and every function within an organization is assessed for its needs and costs. Budgets
are built around what is needed for the upcoming period, regardless of whether each budget is
higher or lower than the previous one (Berry-Johnson, 2021). A performance budget is one
that reflects both the input of resources and the output of services for each unit of an
organization (Hayes, 2020). A program budget is a budget prepared for a particular project or
program. The program budget includes expenses and revenues related to the specific project
(Borad, 2021).
