Budget Presentation: Citizens' demand for understandable financial information coupled with computer technology has greatly improved budget communications

(from Maine Townsman, January 1996)
By Jo Josephson, Staff Write

Though the following article may be somewhat dated, it is still believed to include information that may be useful to the reader.

AUTHOR'S NOTE: In the face of mounting taxpayer unrest, in the name of citizen education, many municipalities in Maine are taking great pains to present their budgets in a "reader-friendly" fashion to ensure their taxpayers know exactly what they are getting for their money.

It used to be that it was enough to tell your taxpayers that about two-thirds of their tax dollars went to education and the rest went to running local and county government. It used to be that you could say that most of the money spent by local government was on roads, with public safety or solid waste a close second.

It used to be you could talk in generalities.

But no more. In these tight times, in these potentially taxpayer revolt times, municipalities throughout the state are recognizing the importance of explaining how they are spending their taxpayers' monies in ways that make sense to them, the taxpayers.

As such, municipalities are putting a lot of effort into making their explanations clear and easy to understand. Which is to say, they are making their budget documents and annual reports more "reader friendly".

Which is to say municipalities are making inherently complicated and dry information more interesting and therefore more accessible to the average taxpayer, not to mention the average reporter on your beat. Some are even developing newsletters to make sure the budget information reaches taxpayers before town meeting time.

In doing so, municipalities are turning more and more to the use of charts and graphs. For as the saying goes in this "USA Today" journalistic era: "A picture is worth a thousand words." And as they turn to graphics, municipalities are transforming the traditional table and pie chart into powerful citizen educational tools.

What follows are examples of but a few of some of the creative attempts at presenting the budget that have been produced by a handful of cities and towns in the southern part of the state, namely Waterboro, Falmouth, Scarborough, Windham and Cape Elizabeth. Most of the graphs and charts are exact copies taken from the town reports, budget documents and newsletters. A few have been modified to make for easier reading in the TOWNSMAN.

THE OVERVIEW APPROACH

Perhaps the first (and sometimes only) step taken by a municipality toward presenting a graphic representation of the budget is when it presents an overview of where the taxes are going. The traditional approach is to develop a pie chart to indicate the three major areas of spending: town, school and county. While the pie chart is perfectly acceptable, some municipalities, like Waterboro, have traded in the pie chart for a dollar bill graphic that comes with many software desktop publishing programs.

And while many municipalities also use the pie chart to show what percentage of the municipal budget is spent on police, roads, etc., a few municipalities, like Falmouth, do that and then some, producing pie charts that cross departmental lines. As such, they answer the taxpayer question of "Just how much are we spending in this town on personnel?" or "What's the total amount we spent on equipment this year?"

Sample pie chart - "Town Budget FY 95-96 by Object of Expenditure"

THE HOW DOES IT AFFECT ME APPROACH

When it comes to getting to the heart of the matter, when it comes to answering the question, "Just how much am I, Dick Blodgett, spending on these services?" Scarborough has come up with a unique series of charts.

Not only has it created a chart explaining how much the average taxpayer pays for services on an annual basis, the chart also notes how much those services are costing the average taxpayer on a monthly and a weekly basis!

As such, in Scarborough, according to last year's annual report, it cost the average residence about $13 a week, or $57 a month, or $685 a year to operate municipal government. It should be noted that Scarborough breaks out education, debt and community services (combined school/municipal programs) from the municipal budget in this chart.

Average Residential Assessment x Tax Rate/$1000 = amount of Tax

Example: $109,400 x $17,000/$1000 = $1,859.80

Gross Budget

1994-1995

%

Annual

Monthly

Weekly

Municipal Operating

$9,450, 096

%36.87

$685.71

$57.14

$13.19

Education Operating

10,473,169

40.86

759.91

63.33

14.61

Community Services

615,973

2.40

44.64

3.72

0.86

Debt Combined

4,404,936

17.19

319.70

26.64

6.15

County

685,640

2.68

49.84

4.15

0.96

TOTAL:

25,629,814

100.00

1859.80

154.98

35.77

 

Scarborough also applies this timely approach to certain municipal operations. As such, a second chart notes that it cost the average taxpayer in Scarborough about $1.70 a week, or $7.40 a month or $88.90 a year for the services rendered by the town's public works department.

Breakdown of Certain Municipal Operations 1994-1995:

DEPARTMENT

%

Annual

Monthly

Weekly

Admin/Planning/Assessing

%3.03

$56.35

$4.70

$1.08

Personnel Benefits

3.52

65.46

5.46

1.26

Fire/Rescue

2.89

53.75

4.48

1.03

Police/Dispatch

5.63

104.71

8.73

2.01

Public Works

4.78

88.90

7.41

1.71

Solid Waste

1.99

37.01

3.08

0.71

Insurance

1.38

25.67

2.14

0.49

 

And if you wonder why Scarborough officials have taken the trouble to break down the costs in such a manner, it is for the purpose of comparing municipal costs with the cost of some common non-municipal services, such as what consumers pay for cable TV or electricity or telephone on a weekly basis.

As such, according to last year's annual report, taxpayers in Scarborough paid about the same weekly to Central Maine Power for their electricity as they do to run local government!

Cost of Some Non-Municipal Services - 1994-1995:

Service Annual Monthly Weekly
CATV-Basic Standard Service

$323.28

$26.94

$6.74

w/1st Premium Channel

455.16

37.93

9.48

w/2nd Premium Channel

551.16

45.93

11.48

Nynex-Residential Service
Premium, One party

152.52

12.96

3.24

Premium, Two party

137.52

11.46

2.87

Economy, Two party

137.52

11.46

2.87

CMP, Ave. Res. Charge

711

59.25

13.67

Source: Town of Scarborough

While Scarborough has opted for a series of charts to explain the impact of the budget on the "average taxpayer", Windham uses a similar and perhaps simpler approach to breaking down the costs for the "average taxpayer" in its newsletter, which it aptly calls "Keeping Windham Connected". The headline on page 7 of a recent issue reads:

Breakdown of Property Tax Bill on "Average" Windham Home for 1995-96

In Windham, the 1995 Median Home Value is approximately $117,500. The property tax bill on this "average" Windham home would be approximately $1,860 for the current fiscal year. This figure is based on the town's current tax rate of $19.50 per thousand of assessed value and our assessment-to-market value ratio of 80 %. If public services provided at the local and county level were billed on a monthly basis, how would such bills compare to other services such as electricity, water, telephone, or even cable television?

Annual Cost Monthly Cost
Municipal Services:
Public Safety

$192.00

$16.00

Public Works

$156.00

$13.00

Community Development

$30.00

$2.50

Library

$30.00

$2.50

Town Management/council

$27.00

$2.25

Social Services/Agencies

$21.00

$1.75

Auto Reg./Tax collection

$21.00

$1.75

Assessing Services

$15.00

$1.25

Elections/Town Clerk

$6.00

$.50

Recreation and Parks

$4.00

$.35

All Municipal Services

$502.00

$41.85

All School Services

$1,263.00

$105.25

All County Services

$95.00

$7.90

COMBINED SERVICES

$1,860.00

$155.00

 

Among the many graphs and charts in Falmouth's Budget Document, a hefty 300-page plus document that contains an introductory "Citizen's Guide to the Budget Document" are a number of charts indicating the cost per capita---the cost of selected municipal programs of general government to each man, woman and child in town.

As such, Falmouth's Budget Document notes that the cost per capita for running the Town Clerk's Office is $12.43, with a total annual cost of $106,950 for FY 96, which was an increase of 1.2 percent over the previous fiscal year.

Town Clerk's Office Cost per Capita

FY 1995 - FY 1996

Program Costs

102,330.00

106,950.00

Population

8,341.00

8,605.00

Cost per Capita

12.27

12.43

% of Change

1.20%

Change relative to inflation

0.60%

WHAT A SINGLE TAX DOLLAR BUYS IN SERVICES APPROACH

If you think looking at spending on a per capita basis is getting to the bottom line, think again. In Windham they have developed a chart that explains what a single dollar buys in terms of municipal services. You can't get any simpler than that.

SHARE OF TAX DOLLAR FOR "MUNICIPAL SERVICES"

The following chart breaks down what a Windham taxpayer receives in services for each tax dollar allocated for municipal purposes:

Road Maintenance

31cents

Police Safety

23cents

Fire/Rescue Services

14cents

Town Management/Council

6cents

Library

6cents

Community Development

4cents

Social/Human Services

4cents

Collection/Accounting

4cents

Solid Waste Management

3cents

Assessing Services

2cents

Recreation and Parks

1cent

Source: Town of Windham

THE COMPARISON APPROACH

No one likes to note increases in the budget. But if you can show that the municipal budget is increasing less than other budgets, like the school budget or the county budget, then explaining it graphically could be a powerful political tool.

The following bar graph appeared in the "Falmouth Focus" in the summer of 1994. The newsletter is published once a year, as a complement to the town report. It depicts increases in the town budget and the school budget and the impact each of the increases is having on the overall tax rate.

Sample bar graph - "Town and School Budget/Tax Rate Increase '94-95"

In Cape Elizabeth they go a step further and compare the budget impact on the tax rate not only for the town and school budget, they also include the impact of community service (combined school/municipal programs) and county spending on the tax rate. And they don't just compare this year with last year; they look back over 10 years.

 

TOWN OF CAPE ELIZABETH, MAINE

Property Tax Rates -- All Direct and Overlapping

Governments (Per $1 000 of Assessed Value)

Last Ten Fiscal Years

Direct

Years Commended Town School Services County Total
June 30, 1984

5.25

16 10

0.25

0.90

23.10

Junc30, 1985

5.76

17.44

0.32

0.88

24.10

June 30, 1986

5.24

17.98

0.30

0.88

24.40

June 30, 1987

5.48

18.57

0.35

0.80

23.20

June 30, 1988*

2.63

9.54

0.16

0.37

12.70

June 30, 1989

3.04

10.00

0.15

0.39

13.58

June 30, 1990

3.12

10.64

0.16

0.48

14.40

June 30, 1991

3.36

11.68

0.16

0.60

15.80

June 30 1992

3.55

12.28

0.15

0.62

16.60

June 30, 1993

4.00

12.39

0.15

0.58

17.12

*Revaluation

Source: Town of Cape Elizabeth

And last but not least, an increasingly common approach is to show how your town's tax rate compares with the tax rate in other towns. Falmouth not only compares the rate with other coastal towns, it also compares the actual tax burden on a so-called medium valued home in each town.

Tax Burden Comparison

Tax* on Medium Valued Homes

Freeport

$895

Castine

$1,163

FALMOUTH

919

Old Orchard

1192

Cumberland

942

Wiscassett

1198

So. Portland

951

Portland

1353

Scarlborough

1026

Kittery

1060

Average

1070

Yarmouth

1,068

Median

1060

*Tax for Town (non-educational) services.

Source: Town of Falmouth

SOME THOUGHTS ON GRAPHICS

Whether it be in the budget document or the annual report or the quarterly municipal newsletter, the insertion of graphs and charts can be a valuable educational tool. But that is not to say a graph is a graph is a graph or a chart is a chart is a chart. There are some basic rules regarding the use of charts and graphs that you should be aware of.

The following ideas were extracted from "Writing for Results In Business, Government, the Sciences and the Professions," by David W. Ewing, John Wiley and Sons.

Charts and diagrams are often economical. They enable you to present an idea or relationship in less space than you could in words and they may enable the reader to grasp the point in less time.

Do not let the lack of an artist or software program affect your decision to use graphs and charts. An amateurishly drawn chart or graph is perfectly acceptable.

Keep charts and graphs simple. They are created to clarify. If you can't strip the information into its essential point or idea, develop a series of charts.

When using bar graphs, don't manipulate the scales to make small changes look larger or large changes look smaller. Present the information fairly. Don't manipulate the data. If you do it will backfire on you.

Use simple, helpful wording. Your titles, labels and captions should be as informative and brief as possible. Devise a title that expresses the main message of the chart or graph. Identify your sources of information.

Tie the chart or graph in with the written text. Most graphics do not stand alone. Place them as close as possible to the section of the text where you refer to it.

Learn from good examples.