Multi-Year Budget Evaluation Economics Assignment - 825 Words

Multi-Year Budget Evaluation Economics Assignment (Essay Sample) Content: Multi-Year Budget Evaluation(Authors name)(Institutional Affiliation) Introduction The multi-year budget is the term used to refer to the creation and formal adoption of a revenue and expenditure document which spans over two years or more. Different states develop and implement their own multi-year budgets based on the revenue collection and expenditures of the state. Through the multi-year budgeting process States are able to improve on their financial management, improve on their strategic and long range planning and link their capital and operating activities. This paper provides an in-depth discussion into some of the key aspects of multi- year budgeting. Trends of Revenue Sources and Balances Multi- year budgets like all other budgets are developed based on the States revenue and expenditure. The revenue is the total amount of funds raised by the state government to fund its activities. Revenue is generated from revenue sources and as a result the trends of the revenue sources play an important role in the budgeting process. The expenditure refers to the revenue spending by the state government. In the event that the expenditure exceeds the total amount of revenue collected, then the budget is said to have a deficit. On the other hand if the revenue exceeds the expenditure the budget is said to have a surplus. The revenue and balances trend are said to be positive if the budget has a surplus and are said to be negative if the budget has a deficit (Fischer, Easterly, 2010). Internal/External Opportunities and Challenges of Revenue Sources The term internal/external opportunities or revenue sources are used to refer to the ways through which the state government can be able to increase its pool of revenue sources and as a result raise more revenue. Internal opportunities refer to those opportunities which are within the control of the local governments like taxable sales. An increase in taxable sales indicates that the government ha s increased opportunities to collect revenue from the sector. On the other hand a decrease in taxable sales indicates that the room for revenue collection from the source has decreased. External opportunities refers to those revenue sources that are outside the control of the local governments but can still provide the local government with an opportunity to generate more revenue. As indicated, revenue sources are the avenues through which the government is able to raise revenue for its activities. The challenges facing the revenue sources refer to those issues that inhibit the revenue sources from being able to provide revenue to the government. A key challenge facing revenue sources is economic collapse which forces most revenue sources to shut down. Goals and Assessment of Local Government Goods and Services The primary reason as to why local governments and other forms of government raise revenue is for the provision of public goods and services. Some of the prioritized goods and services provided by local governments include library services, cleaning services, street lighting, garbage collection etc. The goal of providing this good and services to the public is to enhance public welfare in the community. This good and services are usually provided by the government because of the fact that they are too sensitive to be provided by private entities. Assessment of Internal and External Challenges for Providing Goods and Services As the local government provides goods and services to the public, it is bound to face some challenges. The challenges can either arise from its internal processes or its external processes. Internal challenges are those challenges emanating from the local governments internal processes and as a result the local government has control over them. A key internal challenge associated with the delivery of goods and services to the public by local governments is corruption. Corruption activities by council officials usually impede the local governments capability to efficiently provide some of its goods and services. External challenges refer to those issues which are outside the control of the local government because they are as a result of external processes (Fischer, Easterly, 2010). A key external challenge facing government delivery of public goods and services is insufficient revenue. Most governments are usually faced with deficits which inhibit them from being able to provide quality goods and services to the public and in some instances have to stop providing some services. Evaluation of Budget Stab...