Forrester (1992) Rebudgeting-The Serial Nature of Municipal Budgetary Processes

Rebudgeting: The Serial Nature of Municipal Budgetary ProcessesAuthor(s): John P. Forrester and Daniel R. MullinsSource: Public Administration Review, Vol. 52, No. 5 (Sep. - Oct., 1992), pp. 467-473Published by: Wiley on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/976806 .

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Rebudgeting: T he Serial Nature of Municipal Budgetary Processes

John P. Forrester, University of Missouri - Columbia

Daniel R. Mullins, Indiana University

What role do midyear budget adjustments play in municipal governments? In a survey of officials from central city governments, John P. Forrester and Daniel R. Mullins found "rebudgeting " to be common and sig- nif cantfactors in the budgeting processes of many cities. While often regarded by officials as merely an extension of the normal budgetary process, Forrester and Mullins find the rebudgeting process to be less visible and more technically driven, giving a greater role to administrators than to either the public or the legislature. They also find that the process impacts differently on different services. The authors discuss the political and policy making implications of rebudgeting and the needfor more analyses of the conditions under which it occurs.

"The term 'annual' is unfortunate. It has distracted attention from the real issue to a defense or criticism of the year as a specific unit of measure for budgetary purposes" (Sundleson, 1935, p. 253).

The annual or biannual budget has been the presumed standard time-frame for governmental budgeting. It is used by the federal government as well as by state and local units. To preserve the concept of the annual budget, legislative bodies and executives have implemented strategies that try to cushion the budget from political pressures and economic uncertainty. Ironically, these same strategies may also provide the means for altering the budget throughout the fiscal year. Our objective in this article is to explain why municipal governments make such changes, or more simply, why they rebudget.

Rebudgeting is what governments do to revise and update the adopted budget during the course of the fiscal year. As a continuation of the annual budgetary process, rebudgeting should be a means by which cities can meet the varied and even conflicting objectives of budgeting, including continuity and control, change and accountability, and flexibility and predictability (Wildavsky, 1988). Over the short term, emphasis may shift as fiscal needs change. However, over the longer term, such as over the course of a fiscal year, what might at first be perceived as competing objectives become compatible (Lyden, 1975). In this vein, the approved budget can truly become "the basis for the financial plan for the operations of each agency during the fiscal year" (Office of Management and Budget, 1989b, p. 95, emphasis added). As a living financial plan, the budget must be dynamic. It must offer the capacity to manage the unforseen without sacrificing the control and accountability ingrained in the budget during pre-execution (Pitsvada, 1983).

Public Administration Review * September/October 1992, Vol. 52, No. 5 467



If the budget is the basis for a living financial plan, then modifying or remaking the budget within a year may be a way of bringing about change (Wildavsky, 1988; Caiden and Wildavsky, 1974). Rebudgeting may be used to make the budget more responsive to the needs of budget participants and to the environment. For instance, if rebudgeting is, like budgeting, a process for coordinating activities, disciplining officials, and mobilizing the support of interest groups (Wildavsky, 1988, p. 7), then the process may be infused with politics, providing a means for the legislature and its commit- tees, the executive, and the bureaucracy to renegotiate their agendas (Draper and Pitsvada, 1981). Or, if the process is guided more by technical matters, the range of players may be limited to auditors and controllers, with little input from interest groups (Rubin, 1990). The salience of various actors may depend on the reason(s) for rebudgeting.

The need for change does not necessarily sound "the death knell for the annual budget" (Wildavsky, 1988, pp. 202-203), rather, it underscores the importance of the annual budget as the take-off point for rebudgeting by laying the ground rules for a continuous process. It indicates that, like annual budgeting, rebudgeting reflects spending "commitments made at different times" (Wildavsky, 1988, p. 12). Evidence indicates that a com- prehensive understanding of the budget requires that the ana- lytical focus shift from annual and one-shot to subannual and serial, and that it include, for instance, supplemental and defi-

ciency budgets, updates, executive impoundments, and other possible revisions. All can act as critical safety valves (Axelrod, 1988; Wildavsky, 1988) for the living budget, cushioning it from dilemmas unforseen during the regular approval process. Or they may reflect the misplacement of entrenched procedures and rules, despite desired budget purposes. A budget that reflects these changes may be most appropriately described as annualized, not as annual.

In short, rebudgeting may be an integral component of a serial budget that takes its cue from the initial budgetary process. It may be a way to tuneup the original budget by redressing objectives shortchanged in the initial effort (Rubin, 1990). It may also be a way for departments and agencies to work with the budget office to more effectively accomplish policy objectives. By examining rebudgeting and how it fits into the budgetary cycle, local governments might be in a better position for managing the annualized budget. Our objective is to further understand rebudgeting by examining within-year budgetary changes at the municipal level.

Evidence from the Experiences of Local Officials

We have tapped the experiences of municipal decision- makers regarding their exposure to rebudgeting. In doing so,

Data were collected by surveying officials in 91 U.S. central cities in December 1990, selected at random from the universe of central cities in the United States with populations under 1,000,000 (of which there are 517). A total of 59 officials from 49 (54 percent) of the 91 cities returned completed surveys. We received responses from two officials in 10 of the cities. Seventy-six percent of these were appointed officials. Completed questionnaires were received from representatives of the mayor's office in 16 cities (13 were mayors), representatives of the city manager's/administrator's office in 21 cities (17 were city managers/administrators), and officials in the finance or budget office in 20 cities (15 were finance directors and budget officers).

Respondents from the 59 completed surveys were grouped as follows. Respondents classified as representing the office of the mayor included 13 mayors, 1 deputy mayor, 1 executive officer to the mayor, and 1 administrative assistant to the mayor. Respondents classified as representative of the city manager's/administrators's office included 17 managers/administrators, 3 assistant city managers, and one assistant to the city manager. Respondents from the finance and budget office category included 6 finance officers/directors, 8 budget directors/finance and management division administrators, 1 con- troller, 2 assistant finance/budget directors, 3 senior financial/budget analysts. One respondent did not indicate his/her position with the city and another was not classifiable within these categories. Fifty percent of the respondents had more than 10 years of experience with the city, and fewer than 22 percent had less than 5 (the average was 12 years, 11 months). Generally, we report the findings without singling out the particular classes of respondents identified above, because results from contingency table analyses indicated that respondents tended to be consistent with each other.

We conducted contingency table statistical analyses on all questions by categories of respondents (mayor's office, city manager's/adrninistrators office, finance director's office). The results indicated that where differences were statistically significant, the disparity was one of magnitude rather than direction. The one exception was that 53 percent of the city manager's/ administrator's office respondents said that the midyear process favors the influence of the city administration, whereas only 25 percent of the mayor's office respondents and 18 percent of the finance/budget director's office respondents felt that way. This may suggest that managers and administrators see the mid-year adjustment process as a means for exercising their authority and power over budgetary matters. This is very reasonable since these administrators likely see themselves as responsible for taking discretionary actions to assure a balanced budget; whereas the offices of the mayor and the finance director may see the changes as reflecting primarily technical adjustments (since political decisions are made during the regular budgetary process). The cities represented had budgets ranging from $14 million to $1.4 bil- lion. Half had budgets in excess of $100 million.

468 Public Admintration Review . September/October 1992, Vol. 52, No. 5



Table 1 Within-Year Discretion for Making Budget Adjustments (Percentage)

Budget Administratively Legaly Adjustment Permitted Permitted

Transfers between funds 13 (7) 91 (50) Transfers between functions 33 (18) 93 (51) Transfers between categories 82 (46) 96 (53) Transfers between objects 84 (47) 94 (50) Increases in total expenditures 11 (6) 91 (50) Decrease in total appropriations 96 (50)

Note: Numbers in parenthesis indicate number of respondents.

we surveyed city mayors, administrators, and finance officers regarding their views on the nature of midyear budget adjustments.

The average population of the cities for which officials responded was 159,000. The largest was nearly 900,000 and the smallest, 25,000. The median was 93,000. Sixteen of the cities were organized under the mayor-council form of government, while 33 represented the city manager form. Responses were received from all regions of the country, with 17 of the cities located in the north central region, 16 in the South, 9 in the West, and 7 from the Northeast. Although respondents came from a random sample of large central cities, it is not clear how generalizable the findings are to a broader universe of U.S. cities.

Process and Restrictions Our interest is in alterations in the budget that require for-

mal approval of the legislative body, especially midyear adjustments outside the previously agreed-upon levels of administrative discretion, and in the level of administrative discretion available, as it may greatly influence the need to resort to formal adjustments. To comprehend the adjustments, one must understand their administrative context. Although substantively meaningful, background levels of administrative discretion are implicit in the agreements and the setting of the original budget.

Restrictions on Administrative Discretion. The vast majority of cities surveyed restricted the ability of city administration to reallocate funds within and between functions without explicit approval of the legislative body. Alternatively, legislatively allowable midyear adjustments covered a broad range. The process and products emerging from the space between the level of discretion afforded the administration and that assigned the legislative body was the focus of this research. Table 1 outlines the physical dimensions of this space. Administrative adjustments that would transfer resources between funds were heavily restricted, with prohi- bitions on such transfers existing in 87 percent of the cases. Likewise, transfers between functions within the same fund were prohibited in 67 percent of the cities. Alternatively, transfers between categories of expenditures within a function (e.g., transfers from personal services to materials and supplies within the police function) were allowed in 82 per-

Table 2 Authority to Alter Administrative Discretion (Percentage)

Site of Authority Authority to

Decrase Increase Both Discretion Discretion

Legislative body 9 (5) 21 (12) 43 (24) Mayor 7 (4) 2 (1) 5 (3) City administrator 4 (2) 2 (1) 13 (7) Finance officer 4 (2) 2 (1) 5 (5)


cent of the cities, while 84 percent permitted transfers between objects of expenditures within categories of a function. These findings suggest that administrative flexibility was allowed as long as it did not shift the overall expenditure priorities of the budget. Midyear adjustments which could alter these priorities usually required council approval. As such, these adjustments were available to the city council in more than 90 percent of all cases.

Constraints on administrative discretion tend to be stated in the city charter, the annual appropriations ordinance, or state law, rather than administrative rules/procedures. Rarely can they be altered through administrative means, and, to the degree local authority may relax them, it requires council approval (Table 2).

Expenditure Controls. To further assure the adherence of departments to the priorities established in the budget, many cities reportedly relied on a variety of expenditure budgetary controls. Of the cities surveyed, 93 percent used formal encumbrance systems and 91 percent used formal monthly or quarterly expenditure reviews to minimize the need for rebudgeting. Yet 22 percent of the respondents used formal allotments (i.e., budgeted funds parcelled out to departments on a quarterly or other basis) to control agencies.

Adjustment Process. The city council may receive requests for midyear budget adjustments from the mayor, individual council members, the city administrator, or department heads. The majority (69 percent) of responding cities relied on the city administrator or manager to make adjustment requests; only 24 percent relied on the mayor (Table 3). This process of communicating the request was consistent with the procedures for bringing the original budgetary requests to the city council in most communities. For 82 percent of the cities, if midyear adjustments were to occur, only a simple majority vote of the council was required. The public, however, tended to have little effect on midcourse corrections; although 94 percent of the communities were required to hold public hearings on the original budget proposal, less than 40 percent were required to do so for budget adjustments. Of the cities that did, more than 40 percent indicated that they were not on a par with hearings on the original budget.

The Actors in Rebudgeting

Actors that may affect rebudgeting range from local council and administrative officials to program clients, taxpayer

Rebudgeting: The Serial Nature of Municipal Budgetary Processes 469



Table 3 Process for Midyear Adjustments that Require Action or Approval of Legislative Body (Percentage)

Procedure Affirmative Adjustment proposed by mayor 24 (14) Adjustment proposed by city administrator manager 69 (40) Other 5 (3) Simple majority approved by council 82 (45) Super majority approved by council 18 (10) Hold public hearings on original budget 94 (49) Hold public hearings on proposed adjustments 38 (22) Adjusted hearings equivalent to budget hearings 59 (10)


groups, and the general public. Sixty-six percent of respondents suggested that the city manager saw transfers and appropriation adjustments as fairly routine, and 63 percent felt the council considered them routine. Although viewed as a rather routine process, the roles of actors varied consider- ably between actors and relative to their involvement in the original budget-setting process.

Actor Involvement. Respondents were asked how active they felt actors were in initiating or resisting budget adjustments, compared to their role in determining the original budget. Table 4 indicates the percent of respondents that judged actors to be at least moderately active in the budget or adjustment process. All actors were judged to be less involved in the adjustment process than in setting the original budget. Of the governmental actors, high-level administrators were the primary actors in establishing the original budget, followed by the city council and mayor. Actors outside the government tended to be much less active in determining the original budget. Here, program clients (37 percent) and taxpayer groups (25 percent) are judged most active.

In comparing the original budget process to the process for budget adjustments, one sees a striking decline in the level of involvement of both city officials and the general public. Based on order of magnitude, the decline in public activity surrounding the initiation of adjustments was much greater than that for public officials. The public, however, played a more active role in resisting adjustments. Higher- level administrative officials were, once again, in leadership positions surrounding the initiation of midyear adjustments and were augmented by a relative increase in the influence of program directors. Following these administrative officials in influence were the mayor and city council. However, their level of involvement was only one-half to one-third what it was in the normal budget process. The leadership focus for resisting midyear adjustments tended to lie primarily with the city administrator/manager followed by the city council and mayor.

Actor Influence. Respondents were also asked whether the adjustment process, compared to the original budget process, favored any actors at the expense of others. When respondents perceived a shift in influence, the city administration was most often considered the beneficiary (33 per--

cent), followed by the legislative body (23 percent), program clients (21 percent), and specific departments (19 percent). The increased influence of clients appeared limited to the identification of a previously unknown need to which the legislative body was sympathetic and to the allocation of unexpected additional intergovernmental revenues.

The Stimulus for Rebudgeting in U.S. Cities

The experiences of city officials were further explored along three categories of rebudgeting stimuli. These included adjustments required (1) managerial necessity stemming from the technical complexity of estimating needs and resources and the level of restrictions placed on management decisionmaking, (2) environmental pressures because of changes in the external environment within which services were delivered, and (3) political concerns emanating out of the political nature of public sector resource allocation decisions.

Managerial Necessity. Rebudgeting may be necessary because of managerial or administrative difficulties in planning for the activities of the nation's urban centers. These may include, at a minimum, the following three factors. First, rebudgeting may occur to counter administrative rules or regulations that excessively narrow the ability of department heads or administrators to adjust their budgets to fluctuations in the service environment. Second, rebudgeting may arise because of a need to modify inaccurate expenditure esti- mates. Finally, cash flow may be very erratic, enough to require increasing expenditures for priority items based on greater than anticipated revenues or reducing expenditures when revenues are less than anticipated.

The experiences of city administrative officials regarding the importance of managerial necessity as an explanation for rebudgeting are summarized in Table 5. Respondents were asked to indicate for the adjustments initiated by administrators and for those initiated by legislators how often each of the reasons was involved in stimulating budget adjustments.

Table 4 Percent of Respondents Judging Actor To Be At Least Moderately Active

Site of Authority Authority to

Original Initiating Resisting Budget Adjustments Adjustments

Mayor 82 (45) 41 (22) 35 (19) City council 89 (49) 32 (17) 42 (23) City administrator/ manager 96 (45) 85 (40) 48 (23)

Department heads 100 (54) 80 (43) 26 (13) Program/project directors 81 (42) 54 (28) 18 (9)

Program clients 37 (19) 10 (5) 10 (5) Taxpayer groups 25 (13) 4 (2) 12 (6) Business groups 19 (10) 4 (2) 10 (5) General public 15 (8) 2 (1) 12 (6)


470 Public Administration Review * September/October 1992, Vol. 52, No. 5



They were asked to rate that involvement as "almost never," "sometimes," "frequently," or "very often." Table 5 shows the percentage of respondents that indicated a stimulus was "sometimes," "frequently," or "very often" a factor.

Managerial necessity, overall, was much more important as a stimulus for administratively initiated adjustments than for legislatively initiated ones. Of the specific factors considered, consistent with the above findings, difficulty in accurately estimating expenditure needs was most significant. Forty-five percent of the respondents indicated that it was sometimes a factor in administratively initiated adjustments, and 31 percent said that it was at least frequently at work. Functions most susceptible to difficulties in estimating need included: police services, because of unexpected events necessitating the pay- ment of overtime and additional services; capital projects, because of shifts in priorities, underestimated costs, or esti- mates being made far in advance of the project; growth-relat- ed needs, and needed repairs of both plant and equipment, because of breakdowns; and sanitation, water, and utilities, because of weather-induced shifts in demand and growth.

Restrictions on administrative discretion and difficulties in estimating revenues were also important. For instance, 51 percent of respondents indicated that excessive administrative restrictions were at least sometimes evident in administration- initiated adjustments, and 31 percent indicated the same for legislative initiated cases. Narrative comments suggested several reasons for the importance of restriction on discretion. They included internal and external conditions such as public safety restrictions set at the state level through state laws or as restrictions placed on the receipt of intergovernmental funds; intergovernmental restrictions on the use of grants for parks and recreation services, sanitation and sewerage, and capital projects; and collective bargaining restrictions due in union contracts settled after the adoption of the original budget. Some functions which were "controllable," such as parks and recreation and street repair services, and "large" departments (such as police and public works, which could absorb freezes) also acted as reserves in the event of reduced discretion and environmental pressures in other functions. Regarding revenue estimating difficulties, respondents suggested that health services and planning and code enforce- ment were affected because their funds were determined largely by other governments or the economy. Other functions that might be rebudgeted because of difficult-to-predict revenues included housing and community development, parks and recreation, police services, and courts. Some respondents suggested general administrative functions and capital projects as the first targets to replace lost revenues.

Environmental Pressures. Rebudgeting might also arise from changes in the external environment within which services were delivered. We considered three environmental pressures: (1) environmental resource fluctuation from unanticipated economic decline or expansion, legal exposure, or significant changes in state or national grant programs; (2) environmental need fluctuation from large, unanticipated shifts in demand for services; and (3) environmental mandate from action required by the state or national governments or the courts (e.g., state-ordered increases in the financing of housing programs or court determinations in challenges to property values or federal pollution abatement requirements).

Table 5 Stimuli for Within-Year Budgeting (Percentage)

Basis of Stimulus Administrators Legislators

Sometimes Frequently Sometimes Frequently

Managerial Necessity Administrative discretion 22 (11) 29 (14) 23 (11) 8 (4) Estimating need 45 (23) 31 (16) 25 (12) 8 (4) Estimating revenue 40 (20) 20 (10) 17 (8) 11 (5)

Environmental Pressures Resource fluctuation 34 (16) 11 (5) 23 (10) 2 (1) Need fluctuation 35 (17) 4 (2) 20 (9) 0 (0) Mandate 40 (19) 8 (4) 30 (13) 2 (1)

Political Concerns Redress 37 (19) 2 (1) 42 (20) 6 (3) Symbolism 12 (6) 2 (1) 11 (5) 2 (1) Drift 10 (5) 0 (0) 11 (5) 0 (0) Administrative politics 21 (10) 4 (2) 9 (4) 2 (1)


As with managerial necessity, environmental pressures affected adjustments initiated by administrators more than those initiated by legislators. The most important of these was the environmental mandate, followed by resource fluctuations and need fluctuations. The importance of mandates tended to revolve around the city's physical and legal environment. Sanitation and sewerage, as well as solid waste col- lection and disposal, were frequently offered as functions requiring adjustments due to revisions in state and national environmental regulations. Public safety was also suggested to be susceptible to changes in state criminal law and changes in fire-safety standards. Resource fluctuations, like problems in estimating revenues, emerged primarily from uncertainties surrounding functions heavily dependent on intergovernmental revenues, such as health services and capital projects. Additional problems arose for public transit because of changes in fuel prices and for solid waste disposal because of increases in tipping fees. Environmental need fluctuations emerged out of rather extreme conditions and, as such, were less likely to impact budget adjustments; however, when they occurred, they could have a substantial impact. Economic downturns often created emergencies that required the response of public safety and public assistance. Extremes in weather also taxed public services from water systems (for breakage of mains) to storm and sanitary sewers (from too excessive water intake), and public safety services (for emer- gency services).

Political Concerns. Rebudgeting might also emerge out of political aspirations regarding the public budget. Four political scenarios were considered: (1) political redress as individ- uals or groups from the public attempted to counter losses experienced during the normal budgetary process; (2) political symbolism as adjustments made to counteract decisions taken during the normal budget process for symbolic rather than substantive reasons (e.g., restoring cuts); (3) political drift as adjustments were stimulated because political priorities had changed since the budget was adopted; and (4)

Rebudgeting: The Serial Nature of Municipal Budgety Processes 471



administrative politics as administrators stimulated adjustments to lessen losses or expand in a more favorable political climate.

Political concerns, with the exception of administrative politics, showed comparable levels of activity between administration and legislator initiated adjustments. By far the most active of these in midyear budget adjustment motives was political redress. Administrative politics were of moder- ate importance only for administratively initiated adjustments and political symbolism and drift were only of the most mod- est influence. Political redress and administrative politics appeared to be active in numerous functional areas. Housing and community development, and neighborhood capital and recreation projects, especially, were susceptible to the lobby- ing efforts of neighborhood groups for funding of projects omitted from the original budget. Street and highway repair services were often adjusted midyear if revenues allowed (i.e., they functioned as residual or marginal projects which could be brought on-line if demands emerged and resources allowed). Human service programs were susceptible to lob- bying efforts by external human service agencies and were often expanded to address existing need if resources permitted. Public safety services were involved because of the high levels of public support for the services provided and a per- ception by some cities that they were generally "under budgeted." Administrative personnel could be active in mobilizing this external support.

Overall, as a category, managerial necessity appeared to be the most active stimulus for both administration-initiated and legislative-initiated adjustments, followed by environmental pressures and political concerns. Individually, however, political redress appeared to be the single most important factor in legislator-initiated adjustments and estimating need was by far the most important for administration-initiated adjustments.

Control Management, and Planning Respondents were also asked to comment on the effect of

rebudgeting on the ability of administrators or legislators to control, manage, or plan city operations. Control is the process of assuring that resources are spent for the purposes appropriated and do not exceed the amount authorized. Management is the process of assuring that resources are used effectively and efficiently in carrying out activities. Planning is the process of determining both the goals and objectives of public policy and the mobilization of resources to achieve them.

Control. Respondents overwhelmingly felt that the midyear adjustment process did not adversely affect administrators' control over expenditures. Often this was because the midyear adjustments were generally small (e.g., less than 10 percent of the original budget). Rather, respondents said that the added review stimulated by the adjustment process and the documentation required for adjustments might even have enhanced the level of overall control. Although most impressions were similar for legislative control, some respondents suggested this process might slightly derail the council through responding to community and neighborhood pres- sure and providing an opportunity to patronize. Even so, the

requirement of council approval seemed to reassure fiscal control. More than one respondent indicated that requests for midyear correction might have negative implications for future budgets; this might be considered a form of control in and of itself.

Management. Many respondents suggested that the midyear process augmented management by providing the marginal changes necessary to aid in the achievement of pro- grammatic goals and objectives. Some suggested that the need for adjustments, itself, communicated clear information regarding a manager's performance. Respondents felt that midyear adjustments had no significant effect on the legislative body's ability to manage; as they accurately pointed out, management was not the role of that body.

Planning. Several respondents suggested that planning was a continuous process and that the added flexibility of midyear adjustments allowed for adaptations, reflecting the nature of this process. The vast majority felt that these adjustments improved planning by allowing the budget to respond to changing needs. Some, however, cautioned that adjustments might symbolize less than the most thorough advance planning and, more importantly, a tendency for legislatively initiated adjustments to chart off in directions somewhat at cross purposes to overall planning efforts. In this sense, the midterm adjustment could also reflect a breakdown in planning.

Is the Annual Budget Cycle Too Long? Finally, respondents were asked if the annual cycle of

their budget was too long. Ninety percent of them answered "No." In the context of the midyear process, many suggested that, like planning, budgeting could be viewed as a continuous process. The budget plan must be flexible enough to meet new demands and priorities. The annual budget cycle was not felt to inhibit this. In fact, some respondents pointed out that a cycle of "less than a year would not permit good planning." Given such comments, a caveat was offered that, for planning purposes, any midyear adjustments "must be measured and evaluated against the formally adopted annual budget."

Discussion As evident from the above, participants saw rebudgeting

as an extension of the normal budgetary process. The budgeting environments were similar; however, the interaction of rebudgeting on its environment was somewhat different, as was the role and influence of the actors. Administrative officials usually initiated rebudgeting. This might be at the expense of the legislative body and the general public, because administrative officials controlled the flow of information, and shaped the midyear agenda, and midyear changes were generally limited. The process itself tended to be less visible than the original budget process because the impact of adjustments on policy was unclear and because public participation was not encouraged. When the public participated, however, it generally resisted proposed adjustments. The legislative body appeared to be more reactive in this process. Although department heads and program direc-

472 Public Administmfion Review . September/October 1992, Vol. 52, No. 5



tors were involved less in rebudgeting than.in regular budgeting, they apparently used this process to recoup losses from the normal budgetary process. The flow of information and the reduced role of the legislative body also suggested that the site of checks on midyear increases lay predominantly with higher-level city administration and in the potential ramifications of requested increases on budget successes in suc- cessive years. This process's likely result, then, was to increase the influence of administrative actors.

Administrative actors entered the process primarily out of managerial necessity and environmental pressures, although political redress and administrative politics also served as motivations. Legislators, less frequently active, entered the process in a less predictable manner, yet they tended to be disposed toward funding increases. Environmental pressures, managerial necessity, and political concerns were all active, but at lower levels.

It also appeared that different functions were variably susceptible to midyear adjustments. Functions which, for environmental or managerial reasons, were more volatile received greater attention (e.g., public safety, capital projects); those for which expenditures were more controllable often provided the resources for adjustments when fund balances were insufficient. Moreover, in general, distributive and development services received more attention than did redistributive. This was true except in the more limited cases of political redress and symbolism, but even here, neighborhood specific, distributive services, were heavily represented. Finally, although many adjustments were motivated by need, this appeared to be less important for needs-based (social service) functions. They depended on fluctuating intergovernmental revenue and on the availability of new resources.

Conclusions Rebudgeting and budgeting, as components of a serial

process exhibit many of the same characteristics. Rebudgeting, however, also has unique qualities. Although rebudgeting may not significantly reorient public policies, it may offer a hedge against uncertainty and therefore rational- ize budgeting in uncertain times. During periods of revenue

and expenditure uncertainty, rebudgeting may be used to tune-up policies, requiring more attention to rebudgeting and its effects on policy. If volatility declines, the need for rebudgeting may decline as well. The universal presence of some environmental uncertainty, however, engenders it with value.

Irrespective of the existing environmental characteristics, adjustments to the rebudgeting process intended to open up the process and increase its formality might bring it more in line with the values expressed in the normal budgetary process. To formalize the process, however, might impede its flexibility and utility as a midyear correcting process, perhaps even divert attention away from the annual cycle and, as respondents said, away from planning. As they saw it, midyear budgeting yields marginal changes to agreed upon budget policy priorities. Also, to open the process may resur- rect old policy battles. Restricting the openness of rebudgeting may be a fair balance to the openness of the regular budget process. The check that these alterations do not lead too far astray is found in the process for establishing the succeed- ing annual agreements.

Rebudgeting, at least at the local level, appears to be primarily technically driven. Political concerns are present in this process, but evidence suggests that cities use rebudgeting to marginally adjust programs and to meet management needs in a changing environment. As such, it is an extension of the managerial and planning dimensions of budgeting. In communities experiencing more dramatic adjustments midyear, the political motivations and ramifications may become more pronounced. The conditions under which this takes place are questions requiring additional consideration. Doing so awaits further analysis.

John P. Forrester is an assistant professor of public administration at the University of Missouri-Columbia. His current research and teaching interests are in public budgeting, financial management and policy analysis.

Daniel R. Mullins is an assistant professor of public affairs in the School of Public and Environmental Affairs, Indiana University. His research focuses on issues of state and local public budgeting and finance, governance structure and service delivery.

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Rebudgeting: The Serial Nature of Municipal Budgetary Processes 473



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Forrester (1992) Rebudgeting-The Serial Nature of Municipal Budgetary Processes