Budget 2021: Everything You Need to Know

New York City Financial Plan 

Introduction 

The New York City Financial plan gives the revenues and expenditures for five financial years from 2012. Before the beginning of every financial year, each department has to come up with the estimated budget that will guide them in revenue allocation during the financial year. As an agency contracted to work with the New York City, analyzing previous budgets is essential in coming up with a budget proposal for the coming financial year. This will help to identify the revenue sources for the city and the type of recurrent and new expenditures hence, proper allocation of the collected revenue. This paper analyzes the New York City financial plan presented from 2012 to 2016 and comes up with a budget proposal for a grant proposal of $500,000 for workshops in office administration, security, construction, and apartment maintenance. 

Are total revenues growing faster or more slowly than expenditures? Show the annual growth rates for revenues and expenditures in a table. 

From the financial plan, both revenues and expenditures show an increasing trend with the highest amount in the 2016 financial year. The increasing revenues have been contributed by the increasing taxes and state categorical grants. As compared to the $42,053 taxes collected in 2012, the current expected taxes are up by $ 6,934. In 2012, the city had estimated revenue of $ 68,039 and this has progressively increased to $ 74,081 in 2016. On the other hand, the expenses have also increased throughout the five years with personal service cost increasing from $37, 207 in 2012 to $40,886in 2016. Other expenses have also increased by approximately $2000 from 2012. The total estimated expenditure in 2012 was $ 68,039 while the value increased to $ 77,151 in 2016. 

It can be observed that the estimated revenue and expenditure in 2012 was equal and this required the city to ensure that all the revenues were collected to ensure that no deficits occurred. Comparing the increase in both the revenues and expenditure, it can be observed that the total revenues are growing slowly than the expenditures. Although both had a similar growth rate during the first year, the expenditure increased faster during the following two years before decreasing in 2016. The annual growth rates for total revenue and expenditure are given in Table 1. 

Table 1 : Annual growth of revenue and expenditure 

What is New York City’s fastest-growing category of expenditures during the planning period? Justify the answer with examples. 

The New York City have various categories of expenditure, which include salaries and wages, pension, fringe benefits, medical assistance, public assistance and other obligations such as lease and TFA debt service. Although most of these expenditures are increasing from one year to another, the rate in increase varies from one category to another. The fastest growing category is the fringe benefits category. During the first two financial years, the benefits grew by 418 and progressively increased every year. During the 2016 financial year, the expenditure grew by $ 670 from the previous year’s amount. The increase in the fringe benefit can be attributed to increasing healthcare cost that makes people look for better paying jobs. Employers tend to increase the fringe benefit so that the employees can retain their jobs. Within the five years, the fringe benefits had grown from $ 8011 to $ 10267. 

What percentage of New York City revenue comes from the general property tax? How much is this tax growing in each year of the financial plan? Justify the answer with examples 

The general property tax is one of the leading sources of revenue for the New York City. The revenue from this tax has continued to grow for the last five years from $ 17917 to 20259. The property tax accounts for approximately 27% of the total revenue of the city. In 2013, the property tax had grown by $500 and in the subsequent years, it had grown by $539, $659, and $ 642 respectively. The increase in revenue from property tax can be attributed to the increase in property value. As the value of the property increases, the tax charged increases proportionally. However, this increase might be as a result of an increase in the general tax rate of property. 

Budget Justification Proposal 

Since the agency is partnering with the New York City, it will adopt most of the allocated values for both revenues and expenditures. The expenditures on the budget will be mainly workshop costs that will involve office administration, security, construction, and apartment maintenance . The amount of expenditure in each department will however vary depending on the materials being purchased and the amount of work undertaken. The value allocated will however, increase from the first financial year because of inflation. 

The expenditure that will be catered for using this grant will be salary, medical assistance, and fringe benefits. In the first year, a total of $ 90, 350 will be allocated for salaries of all the new employees in the program. Since this is not a whole year program, the salaries are paid per session, which will take three months each. Further $ 21,200 will be allocated for medical assistance and the remaining $ 38,150 will be allocated for fringe benefits. In the second year, salaries, medical assistance and fringe benefits will utilize $100 050, $ 25,040 and $ 43,010 respectively. In the final year $120,060 will go into salaries while $ 28, 080 and $ 31,060 will be allocated for medical and fringe cost respectively. 

The on-job training is totally new project being introduced and this implies that there will be a need to employ new employees. Since the duties that such employees will undertake are quite different from the normal clerical and administrative duties, they cannot be treated as F &A as usually treated by the institution. These new employees will solely perform duties that are directly related to the program. 

These individuals will consist of program managers and assistants who will work hand in hand to ensure that the objectives of the training are met in time and within the budget. The rate of payment will be based on the number of program sessions in a year. The managers’ main duties will be to develop and evaluate the program components as well as analyzing the information gathered to be presented to the project stakeholders. Each department will employ one project manager. On the other hand, the assistants will be in charge of preparing program sessions, preparing reports, and distributing training announcements among other duties assigned by the manager. 

The on-job training sessions will occur alternatively so that not all the employees are on training at the same time. Each department will have two sessions each year and after three years, the six sessions will have covered all the required skills in all the fields. 

Conclusion 

Budgeting is a crucial task that any institution needs to undertake with great consideration. Allocation of funds must be done in a proper manner such that the costs that are proposed are allocable to the program. Such costs should also be allowable under the principles or guidelines of the federal cost. In some cases, administrators allocate huge amounts to cheap tasks hence the allocations become unreasonable. For every budget, the costs should be within the limits that are seen to be consistent with that of other similar institution and organizations. With the proposal grant of $500,000 to carry out on-job training in various departments in the city, the agency in partnership with the New York City adopted some of the city’s sources of revenues and made adjustments on the grant amount and expenditure on its financial plan. 

The main areas of focus using this grant will be payment of salaries, medical assistance, and benefits to the people employed to steer the program. Expenditure is seen to be growing faster compared to the revenues of the city and this requires more adjustments on collection of revenues so that the city can be able to comfortably meet its expenditure and be able to expand. 

References 

Five Year Financial Plan Revenues and Expenditures ($ in millions). Retrieved from <http://www.nyc.gov/html/omb/downloads/pdf/fp6_12.pdf/> 

White, R. J. (2010). Internal Revenue Service: Assessment of Budget Justification for Fiscal Year 2011 Identified Opportunities to Enhance Transparency . Collingdale: Diane publishing.