Seeing the Budget: Year-to-Year Change (Part 3)
The 2012-2013 Fiscal Year for the City of Kansas City, Missouri just started and City Council approved the budget just last month. This post looks at how this year's budget compares to the budget of previous years. In the previous post, we looked at how the budget is made and the first post illustrated the structure of the 2012-2013 budget.
As detailed in Kansas City’s Comprehensive Annual Financial Report money for the annual budget each year comes from the revenues of the previous fiscal year. For the upcoming 2012-2013 Fiscal Year the city has a budget of $1,306,1455,468. The most recent Annual Financial Report (for the fiscal year 2011-2012) has not been released yet, so the current budget is based on the projected revenues from the 2011-2012 Fiscal Year. When making a city budget the City Manger, Mayor, and City Council members try to estimate how much each department should spend each year, but those figures are not always feasible. For instance, for the 2011-2012 Fiscal Year the city had a budget of $1,245,267,574 but in the most recent monthly financial reports they have projected going over budget this by $371,809,083 for a total of $1,617,076,657 worth of expenditures.
The number used to calculate how much money to budget comes from the Comprehensive Annual Financial Report. So for the 2011-2012 Fiscal Year, they based the budget on Revenue from the 2010-2011 Fiscal Year. In that year the city brought in about $1,421,270,000 of revenue from various sources.
The types of revenue the city earns can be divided between Government Activity and Business-type Activity. Government activities are programs and departments—public safety, public works, neighborhood development, culture and recreation, health, and economic development--in the city while Business-like activities concern water, sewers and aviation. For FY 2010-2011 the city brought in $1,023,852,000 from Government activity like charges from services, operating grants and contributions, property and other taxes, and investment earnings. Business-type activities--charges for services, operating grants and contributions, capital grants and contributions, and investment earnings--generated $397,418,000 of revenue the same year.
The biggest sources of income and revenue for the city are service charges and the various types of taxes. Property Tax, earnings & Profit taxes, sales tax, hotel & restaurant tax and other taxes bring in the majority of the money with other big boosts from operating grants and contributions plus investments in US Treasury securities and US Agency Securities.
Also included in the Annual Financial Report is a record of how much each department actually spent rather than what the 2010-2011 budget allocated for each department. The current Submitted (preliminary, not yet adopted) Budget lists the budgeted amounts for each department and the projected expenditures, which plays into how local lawmakers are budgeting for the 2012-2013 Fiscal Year.
In the next post we’ll see how Kansas City compares to other, similar cities in the Midwest for budget amount and structure.