ABSTRACT

In its simplest form, target-based budgeting is a budget reform that re-juggles some of the traditional functions of the budget office and the departments during the process of budget requests. In practice, the ceilings, or targets, in target-based budgets are often a percentage of a constant services or maintenance of effort budget. The earliest reference to target-based budge ting in the budget literature is in Arthur Buck's 1929 text Public Budgeting. He describes a system of budgeting in Berkeley, California, in the 1920s that would today be recognized as target-based. An attraction of target-based budgeting for politicians is that it makes it both possible and easy to reduce revenues and to force cuts on departments that the departments have to implement. Some cities that have used target-based budgeting have used it not only when revenues were declining, but when politicians wanted to cut the property tax and get political credit for it.