An annual budget report is an overview of the city’s finances for the current year. It includes detailed information about revenue, expenses, debt payments, capital investments, and other items related to the city’s financial operations. The report also provides insights into the city’s financial health, such as its credit rating, cash reserves, and long-term liabilities. Chicago and New York City are two of the largest cities in the United States, and their budgets reflect the unique needs and priorities of their populations. Therefore, the formats of these cities’ budgets require evaluation and analysis to determine their strong and weak features from the perspective of being appropriate for understanding by general citizens. Selecting the most suitable budget format promotes positive development of the city in all spheres, predicts necessary changes in comparison to previous editions, and ensures that the citizens’ needs are met.
New York City uses a hybrid budget format, which combines the elements of line-item, program, and performance budgeting. This means that the budget includes detailed information about each program and line item, as well as performance measures and targets that are used to assess the effectiveness of spending. In addition, New York City also uses a modified accrual accounting system, which is a hybrid of the traditional accrual and cash-based accounting systems (New York City Council, 2018). This format provides a more comprehensive view of the city’s financial position and allows for better planning and decision making. The budget is organized into several main funds, including the General Fund, which is the city’s main operating fund, and the Capital Fund, which is used for long-term investments such as infrastructure improvements.
The structure and content of New York City’s annual budget report can be viewed as comprehensive and well-organized, with detailed narratives and explanations provided for each program and department. The report includes a detailed breakdown of revenue and expenditures, as well as a section on the city’s economic outlook and trends. However, despite the detailed nature of the report, it may be difficult for the average citizen to understand the budget without prior knowledge or a background in finance.
Chicago also uses a hybrid budget format, which includes both line-item and performance elements. The city’s Office of Budget and Management (OBM) is responsible for producing an annual budget document. OBM also includes performance measures and targets for Chicago’s budgeted resources in its Budget Progress Report. Furthermore, Chicago’s OBM applies a modified cash-based accounting system, which is more focused on the city’s cash flow and less concerned with the long-term financial position (Lightfoot, n.d.). The budget is organized into three main funds, the first one being the Corporate Fund, which is the city’s main operating fund. The other two are the Capital Fund, which is used for long-term investments, and the Debt Service Fund, which is used to pay off the city’s debt.
The structure and content of Chicago’s annual budget report are also well-organized and provide a clear picture of the city’s financial situation. The report includes a detailed breakdown of revenue and expenditures, as well as a section on the city’s financial outlook and trends. However, like in the case of New York City’s budget, the average citizen may find the budget difficult to understand without prior knowledge or a background in finance.
In terms of evaluating the proper format for each city, both New York City and Chicago’s formats are appropriate for their size and programs. The budget reports reflect systems used in the discussed cities. The modified accrual accounting system used by New York City is more comprehensive and provides a better picture of the city’s financial position, making it a better choice for a city of its size and complexity. The modified cash-based system used by Chicago is more focused on the city’s cash flow and is better suited for a city of its size and programs.
In terms of the structure and content of the annual budget reports, both New York City and Chicago do a good job of presenting a clear picture of the city’s financial situation. However, there is room for improvement in terms of making the budget more accessible to the average citizen. To achieve this, both cities could include more narratives and explanations in plain language, as well as visual aids such as charts and graphs to help illustrate complex financial information. Thus, it is possible to utilize data visualization tools to make complex budget information easier to understand and incorporate interactive elements such as links to source documents for further research. Additionally, budget creators should simplify the language used to explain the various budget elements in order to make the material more accessible to the general public.
In conclusion, both New York City and Chicago use appropriate hybrid budget formats for their size and programs. However, both cities’ governments could utilize a set of approaches to make budgets easier to understand for citizens. For instance, they could simplify the language of the narration, utilize visual aids, and include graphs and charts to make the budgets more concise. By improving the budget structure, each city’s officials will ensure accessibility and transparency of their budget plans.
References
Lightfoot, L. E. (n.d.). City of Chicago 2023 budget overview. Web.
New York City Council. (2018). Fiscal 2018-2022 financial plan overview: Report to the City Council committee on finance. Web.