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  • Writer's pictureJohn Chisholm

Hey, What's Your Budget?

It's clearly a budget. It's got a lot of numbers in it.     

George W. Bush

A budget is about telling your money where to go.

City budgets are financial documents. But they are moral documents as well. They are an articulation of what and whom our city deems worthy of investment.

Here's the best guide to municipal budgeting in Canada I could find.

Budgets aren't just affairs of arithmetic, they are expressions of our values, our purpose, our ideas, our hopes and fears.

It's also true that politicians imbue budgets with magical powers to create jobs, absolve them of responsibility, solve crimes, stop bad behavior and encourage good, keep law and order, educate, cure, entertain, attract tourists, and generally make cities 'bold', great and... you know... innovative. Whatever budget buzzword that's ringing in your head the important point is that the connection between the budget and all these things is nebulous at best and nearly impossible to prove by fact or bear out in practical experience.

Ahead of the Municipal Election in Halifax this is the first in a series of posts that are intended to decipher and make something useful of the city budget.

To start, the City's budget is not our budget. The city's books do not reflect much at all about our wealth, prosperity, happiness, progress, problems, debts, or discontent. In fact, citizen's wealth can be at odds with the government's treasury and it takes a great deal of citizen engagement and understanding to align the often competing interests.

The big idea though is that we pay a certain amount of taxes - Local government is funded mostly by our property taxes, transfers of other taxes we've paid, and licences, fees, fines, permits, and other bills we pay to them - and they redistribute the money to give us the hard and soft assets and services that make us a prosperous people in a peaceful community. All this is transactional; it is anticipated and kept on course by a Budget.

Visual Story-Teller Ariel Aberg-Riger's take on the sometimes-impenetrable city budget process in Bloomberg

The budget is just a story we tell ourselves about where our money is going to come from and where it's going to go in the future.

There also has to be some shared sense of WHY.

No one can understand a budget by itself. It's just a part of the story we tell ourselves about the shape of things to come. You always need something to compare to. Budgets are comparative documents. Budgets can be compared to past results, compatible cities, ideal goals, or even themselves. For example, how much of the total budget is spent on police (more on that later).

Budgets need to be understandable in human terms. Most people understand their own spending and earning. And most people have a sense of how much taxes they pay. When budgets can be seen per person (called per capita), per week or month, people can get a better sense of a city budget in measures they are familiar with.

HALIFAX budget is so inaccessible that even professional researchers would have trouble deciphering it and no attempt is made by the city to make the budget comparable and understandable. The truth is that everyone knows people don't like math and will avoid it if they can. So numbers are often used to befuddle, obfuscate, and hide greater truths.

I love numbers. I have a degree in International Finance and Masters from London School of Economics, New York University Stern School of Business, and HEC Paris. My life is about accounting, math, taxes, and numbers... though none of that means I don't make LOTS of math mistakes. I will share that when I open the HALIFAX BUDGET my heart sinks and I feel a little blue. I feel that way because I can tell based on my experience, not only has no attempt been made to make the budget understandable, they've gone to some length to make it oblique and disengaging.

If you need to take a break here why not listen to Paul Simon sing WHEN NUMBERS GET SERIOUS

The budget, at a glance, should be part of an understandable story able to answer the basic questions: what are our values, what is our purpose, our best ideas, what are our hopes and fears. How are we directing our limited resources in the best way?

If you'd like to dig deeper I'm happy to help. I also have this link to the STRONG TOWNS course on budgeting, a HOW-TO guide for making sense of Local Government Budgets. It is brilliant.

From here I'll be doing my final posts in this series ahead of the Municipal Election on other aspects of budgeting finance, and rreally focusing in on taxes.

The big idea is that Citizens are the creative engine, their elected representative turn that creative insatiable urge for better into policy and budgets, and then the bureaucracy carries out the policy within the bounds of the budget and sustainably realizes the creative dream. That's the magic trinity of local government. 3 is the magic number.

Here's a palette cleanser. Blind Melon School House Rockin' out 3, The Magic Number.

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