Political, institutional and organizational effects on the accuracy of local government revenue estimation

Date of Completion

January 2000


Economics, Finance|Political Science, Public Administration




Revenue estimation is an integral part of the budget process. This research focuses on exploring the revenue estimation process, and the effects of political, institutional and organizational arrangements on the accuracy of local government revenue estimates. Data from a national survey of revenue estimators, financial data from 50 large cities, and information collected through personal interviews are used to develop a comprehensive picture of the municipal revenue estimation process. The effects of form of government, council involvement in the process, estimator education and training, estimation method, and other aspects of the process on estimation accuracy are explored. The place of revenue constraint in the budget process is also explored. The results of this research suggest that high levels of council involvement in the estimation process result in higher levels or error; that accuracy does not significantly differ by form of government, and that buffer mechanisms arising in mayor-council cities serve to insulate the revenue estimation staff somewhat from the vagaries of budget politics. The results also suggest that the early budget process is not slavishly anchored to the revenue constraint, but is a tentative, exploratory process that incorporates mandates, opportunities, and historical information as well as the initial revenue estimate. ^