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Chapter 11: Analyzing a Local Government’s Budget
Computer displaying spreadsheet

Today a computer-literate reporter with a desktop work station can run any of several spreadsheet or statistical programs to interpret data using comparative, descriptive and inferential statistics.

 

Introduction

           Thanks to powerful modern desktop and even laptop computers, a reporter like Tori Baxter can go out on the Web, find databases and import them. She can buy copies of local government agencies’ data on CDs and save them to her hard drive. And she can run any of several spreadsheet or statistical programs to interpret those data using comparative, descriptive and inferential statistics.

           When Tori gets a copy of Valleydale’s proposed budget, for example, the first thing she does is run it through a spreadsheet program to make sure all the percentage increases and decreases over last year agree with the city’s raw numbers. She can also find missing items or gaps where the numbers don’t add up. Then, using the Web, she can import a database from the University of Virginia that shows the municipal budgets for cities near Valleydale and for other cities statewide that are about the same size as Valleydale.

           From those she can run comparative statistics to see whether Valleydale’s proposed budget is out of line with those of similar cities. Finally, she can use inferential statistics to compare the overall increases and decreases in the other cities with those in Valleydale to see whether anything statistically significant is going on — in other words, are the discrepancies happening by chance, or is a sustainable pattern emerging?

           Tori should be able to do the job in a couple of hours. She can also take her data and display them graphically in fever, bar or pie charts, labeled with type in whatever point size and font she chooses. More sophisticated displays can be done by a newsroom graphic artist in Jeffersonville simply by calling up Tori’s numbers and importing them into his or her own graphics software. In the broadcast or online newsroom, the same thing can happen.

 

Use your reporting skills

           There are five things we must remember about this miracle (See Box 11.1):

           1. The discussion from Chapter Six on sources and levels of observation holds for databases as well. Who, or where, did this database come from? Did you or your news organization generate the database yourself from a survey or poll? Is it from a local government? An advocacy group? In other words, are you analyzing and interpreting your own data, or data provided by others? Are these raw data (remember, data is plural), or have they already been analyzed or massaged in some way? If you are getting data or a database from the Web, who generated it? Have they got an ax to grind? Are they generating or spinning the data to push their cause or agenda? What did they leave out? Can you call them and get more information about them? Can you talk to a real person? How do they know what they say they know?

           2. Garbage in, garbage out. As you analyze data, whether they are your own or have been supplied by someone else, bear in mind that old computer-geek expression. If you plug in data that are old or wrong or improperly set up for the program you’re running, you will get useless results or, worse, results that look neat and plausible until you put them in the paper, and then you realize that you’ve just given Valleydale a population of 5 billion. If you are unsure about what you are doing, get some expert help. Some newsrooms now have such a person. If there isn’t one in the newsroom, chances are he or she is in the building, often on the business side or in data processing. If you can’t find one in-house, go to your local college or university’s politics or sociology department and find the guy who teaches statistics. He or she will know what you want to do, and how you’ve screwed it up. He or she can probably also help you determine the reliability of your database, as discussed in No. 1, above.

           3. There is a Two-Minute-Mile Rule: When he was my editor at The Tallahassee Democrat, Walker Lundy would tell us to trust our common sense. If we were given four affidavits from Supreme Court justices swearing that somebody had run a mile in two minutes, but we just couldn’t believe that that could be true, we were probably right. With computer-assisted reporting, if your data are telling you something that you think can’t possibly be happening, you’re probably right. Check and re-check your data, your program, your interpretation. And get another set of eyes on it. Always remember that every computer should have a port where you can plug in common sense.

           4. Computer-assisted reporting is another tool for gathering information. It complements our other reporting tools; it does not replace them.  If your numbers tell you something is happening, go out and find the real people it is happening to, and let them show your audience through their own stories. Again, the best stories are about things happening to people, not things happening.

           5. When you write your story, keep numbers out of your narrative as much as possible. Talk about increases or decreases, or trends, or developing issues, and the people who illustrate those. Look for ways to make numbers conversational: say “more than two thirds” instead of 68.4 percent; “nine people in 10″ instead of 91 percent; “about half” instead of 48.2 percent. Put the actual numbers in easy-to-read graphics accompanying the story. Winnow all the stuff that takes focus away from what you really want to show.  Approach those graphics as you would a story: What’s this story (graphic) about? What element or elements do I need to focus on to show that? Get rid of the clutter.

    

Box 11.1 The Computer Can’t Do It All

           Remember that computers won’t do your thinking for you. Some things to keep in mind about computer-assisted reporting:

  1. Where did your data come from? Is the source reliable?
  2. GIGO — Garbage in, garbage out. If you plug in bad data, you will get bad results – useless or wrong. Get someone to help you who can catch those mistakes.
  3. The Two-Minute-Mile Rule: If your data are telling you something that you think can’t possibly be happening, you’re probably right. Check and re-check. Don’t leave your common sense in the other room.
  4. Computer-assisted reporting does not replace other reporting tools; it increases their value. Reporters still need to talk to people – a lot of them.
  5. The computer can’t explain things to an audience. As the reporter, you need to figure out the best way to do that. Often, that is through the skilled use of graphics. Avoid putting a lot of numbers in your story itself. 

 

Finding the impact in a local-government budget

           A spreadsheet program can do wondrous things when it comes to crunching numbers. What it can’t do is tell you what strategy you should adopt for analyzing them. That’s where looking for the impact comes into play. It seems reasonable to expect that most people in your audience will want to know whether spending is going to increase, where those increases will happen, and why, and whether their taxes will go up as a result. (Remember, in almost every state, local governments have to balance their budgets. Unlike the federal government, they may not spend more than they take in.)

           To get those answers you will need to compare the proposed figures for next year with the actual figures for this year. That two-year comparison will go a long way toward helping your audience fathom the proposed budget. Almost all local governments provide those comparison figures in the proposed budget they release, but it is up to you to check their figures. (Budget comparisons that show trends over the last five years are even better, but they are beyond the scope of Exercise 11.)

           Remember that a proposed budget is just that. As we discussed in Chapter 10, it must survive several work sessions of the elected governing body and a formal public hearing before adoption. That process can take three months or more. Any story you write about a proposed budget should make that clear.

 

Ethics

           Most of you have heard the saying “Statistics don’t lie, but people lie with statistics.” When it came to stories about data generated by others, there was a time when news media were too lax in reporting results of polls and surveys — failing to find out how a survey was conducted, for example, or ignoring what organization commissioned the poll. Or they simply treated all such surveys with equal skepticism, contenting themselves with simply reporting the results and who generated them, or refusing to report any poll results at all.

           Today many news organizations have policies regarding such reporting. Stories about surveys or polls must include who or what organization commissioned the study, how it was conducted, and how reliable it is, including the margin of error for the findings.

           When news organizations design and carry out their own computer-assisted projects, their standards for reporting the results should be at least that rigorous. As a journalist your primary moral obligation remains, as always, to serve your audience by providing accurate, fair and appropriately contextualized information. That means that you should always tell your audience how you collected and analyzed your data, and whether you had help from experts who didn’t have an ax to grind.

           As with any other story, your words shouldn’t outrun your facts. Often an opinion, belief or behavior that is not in the majority is still significant and worth reporting, but it should be contextualized to show how prevalent it is. Also, journalists might use computer-assisted reporting to try to verify a hunch, an informed opinion based on anecdotal evidence, or a formal hypothesis. But they must be prepared to find another explanation if the analysis doesn’t support their assumptions. 

           Finally, if, as in Exercise 11, your data point an accusing finger at an individual or organization, that person or group must be given an opportunity to respond. You should also seek alternative plausible explanations from other sources. That is not only a matter of fairness to the person or group; it is part of your obligation to your audience.                   

 

Strategies

           Many journalists consider themselves numerically challenged. A lot of them think that their math phobia prevents them from attempting computer-assisted reporting, even something as straightforward as checking the figures in a city’s budget. It doesn’t. But remember that the computer and its spreadsheet and other data analysis software are just another reporting tool. As the reporter, you should be figuring out what questions to ask, and what the story is about based on the answers you are getting. The computer will do the sorting and the math for you, but you still do the journalistic thinking, and the writing based on it.

           With that in mind (See Box 11.2):

           1. Make sure your newsroom has the resources to do the kind of computer-assisted reporting you envision.

           2. Use experts to help you determine whether such things as surveys and computer analysis of data will answer the questions you have. Use those same experts to help you design your project and to help you interpret your results.

           3. Put a human face on your data. Find people to interview who will show what your data are telling you. Remember that good stories are about people involved in events and issues,  not just about events and issues.

           4. Keep numbers out of your story as much as possible. Make generous use of graphics to summarize your data for your audience.

           5. Use your impact, elements, words process to organize and tell your story. Focus on what’s most important; leave the other stuff out. As with the reporting for any story, your audience won’t see or hear a lot of your data analysis.       

    

Box 11.2 Strategies for Computer-Assisted Reporting

           Remember that computer-assisted reporting is another tool in the journalist’s kit. The computer crunches the numbers; you still do the journalism. Here are some other tips:

1. Don’t launch a computer-assisted reporting project until you know your newsroom has the hardware, software and human resources to do it.

2. Find an expert or two to help you set up your program and analyze your data.  

3. Put more people in your story than numbers. As you would with any story, interview human beings, then show your audience how they are affected.   

4. Make generous use of graphics to show numbers. Keep most of the numbers out of your story.

5. Impact, elements, words. Show what’s most important rather than reproducing every result you got. 

 

Exercise 11: Analyzing Valleydale’s budget

           Exercise 11 is a fairly straightforward tutorial that takes you through a Microsoft Excel-based spreadsheet program. You will plug in hard-copy figures given to you by Valleydale’s city manager showing the city’s proposed budget. You will run some operations on those data once you have entered them. Following the tutorial are some guide questions to help you interpret your data. Following that are quotes the city manager gives you when you call to ask him about the budget as you have analyzed it. Do not look at the guide questions or the interview until you have crunched your numbers once.

           Assume that the release of this proposed budget comes early in November, three weeks after City Council asked the Finance Committee to investigate the city manager’s handling of city finances.

           On the day that Valleydale City Council calls for the city manager to submit a proposed  budget for the next fiscal year (July 1-June 30), Tori Baxter asks for a copy. The city manager knows it’s a public document at this point, so he does not quibble about releasing it. But the proposed budget isn’t given to Tori until 4 p.m., and Tori is expected to get her story in the next day’s paper and a summary on the Web. There isn’t enough time to get anything on the evening news broadcast, but the station has expressed interest in a 30-second RDR for 11 p.m., depending on what the proposed budget shows. Tori will have to work fast, but because her computer has a spreadsheet program, she ought to be able to analyze the budget by her deadlines. Because the entire proposed budget is many pages long, she will focus only on key elements of it.

           This exercise walks you through part of what Tori would do to analyze those key elements of the proposed budget using her spreadsheet program. The program you will use is Microsoft Excel, but several Windows- and Mac-based spreadsheet programs share the same basic characteristics and commands. It’s easy to adapt to the others once you’re fairly familiar with this one. Many cities now provide their budget data online or on CD, so that the data can be imported into a spreadsheet program. But because some small communities still do not provide data in those forms, in this exercise you will learn how to enter data by hand from a hard-copy source. Make sure that you enter your figures correctly. Garbage in, garbage out.

           Once you have analyzed the budget using the tools and commands that the exercise will walk you through, look at the interview with the city manager. Using both your data analysis and the interview, write a story for The Herald and a blurb for the website about the city’s proposed budget. Once you have done that, your instructor might assign you to write a 30-second RDR on deadline in class.

           Adapted from “Introduction to Spreadsheets: Microsoft Excel,” by Rich Gordon, for Investigative Reporters and Editors. Used by permission.

 

Entering Your Data

           First, load Microsoft Excel by following the protocols  for your personal computer or work station. For most users, that involves clicking on the Start menu, then clicking on Programs, then going to Microsoft Excel and clicking on it. You will get a page full of empty boxes, called cells, in a grid. Rows run east-west and are numbered; columns run north-south and are designated alphabetically.  

           If it isn’t there already, move your cursor (in Excel it looks like a plus sign instead of an arrow) to cell A1 (first column on the left, first row down) and type the word Category. Hit Enter. Now save your new spreadsheet so you can  create a name for it. You probably know that  to  Save you can left-click on the Save icon (looks like a diskette, same as in Word) at the top of your screen, or click on  File at the top of your screen and then on Save. Your instructor  will tell you what convention  to use to name your spreadsheet. With my classes I use this protocol: valleybudbr.  “Valley,” of course, is for “Valleydale,” “bud” is for “budget,” and “br” are my initials. Using this protocol, everyone’s slug will be the same for the first nine letters, but if your name is Tom Green, your slug would be valleybudtg; Jessica Simpson’s would be valleybudjs, Heath Ledger’s would be nothing because he’s dead, and so forth. As you do with Microsoft Word, save often.

           After you hit Enter and save your spreadsheet, move your cursor over to cell B1, just to the right of the cell you’ve just typed in, A1. In cell B1, type FY Current (for current Fiscal Year or budget year. Again, the fiscal year is distinguished from the calendar year in that it runs July 1 through June 30. In your stories, always call it the budget year rather than the fiscal year.). 

           Oops. The words “FY Current Year” are too wide for cell B1. So let’s widen your columns, and we might as well start with column A, where you typed in Categories. Move your cursor onto the vertical line separating column A from column B at the top of the column. If you’re in the right place you’ll see a double boldfaced arrow pointing left and right, bisected by a vertical line.  Now click, hold down and drag to make the column as wide as you want it. Do the same for column B. You can see from your hard copy data above that there will be row headings in column A that are even longer than the word “Category,” so go ahead and make column A wide enough to accommodate the widest heading you have. You’ll have to guess at the right width for column B until you have entered your data. Now go to cell C1 and type FY Proposed, and widen that column. Then, in cell D1, type Change, and widen that column.

           Now, starting in cell A2, beneath Category,  enter the budget categories from Box 11.3. Start with  “EXPENDITURES,” to show that you’re on the spending part of the budget, then Public Safety (that’s the police and fire departments), and so forth. Hit Enter after you type each entry. When you try to type “Public Works” after “Public Safety” you’ll notice that the program tries to repeat “Public Safety” for you. This happens because the program thinks it is so smart that it can anticipate what you want it to do. You, of course, do not want to type “Public Safety” twice, so go ahead and finish typing “Public Works.” The program will reluctantly go along, knowing you will hit the computer with something large if it doesn’t. The same thing will happen when you try to type “City Manager” after you type “City Council.” If you make an error when you are typing in column heads or data, simply hit Backspace until you have erased the error, or hit Enter and highlight the cell again, then type over your error and hit Enter again. Remember to keep saving your work.

           Now skip a space in Column A and type “REVENUES,” your income categories. Then enter each category under Revenues.  Then go to column B and enter the current actual budget figures, again from Box 11.3,  corresponding to the appropriate categories of expenditures and revenues. Do the same in Column C for the proposed figures.  Don’t worry about putting dollar signs or commas in at this point. We’ll get to that in a minute.

           When you start to type in the revenue and expenditure figures, numbers like 18965491 might be converted to gibberish when you hit the Enter key. If that happens, it means your columns are too narrow, and the computer is trying to figure out a way to fit all those figures into too skinny a space. Go to the top of the column, as you did with your other columns, and hold and click to widen the column. Even after you’ve done that, all of your figures will look like just a sequence of numbers at this point, because they won’t even have commas. So let’s re-format the whole block of numbers now.

    

Box 11.3 City of Valleydale Proposed Budget

                                                        Current                       Proposed

EXPENDITURES

Public safety                               $ 1,411,052                 $1,432,100

Public works                                  1,503,133                   1,606,200

Leisure services                              360,710                      435,970

City Council                                       829,437                   1,600,060

City manager’s office                     687,015                   1,313,200

Total expenditures                       4,791,347                   6,387,530 

REVENUES

Property taxes                             $3,042, 263                 3,363,800

Local sales tax                               2,285,413                  2,318,600

User fees                                            408,462                      801,700

Water & sewer                               1,577,391                  1,984,855

Total revenues                               4,791,347                  6,387,530

 

           Move the cursor to one corner of the top left cell showing budget figures (B3), click your left mouse button and hold it down, and then move the cursor down and to the right until you’ve highlighted cells B4 through  C15 in a tasteful blue-gray, or maybe gray-blue. (Cell B3 won’t change color, for some reason.) Release the mouse button. Make sure your arrow stays inside the highlighted area, and then click the right button. You will get a drop-down box with several choices. Left click on “Format Cells.” You will get a series of stacked  “folders,” labeled “Number,” “Alignment,” “Font” and so forth. Click on “Number” if you aren’t already there. You will get a drop-down list with numerous choices: “General,” “Number,” “Currency” and so forth. Left click on “Currency.” You will also see two more choice boxes, “Symbol” and “Negative Numbers.” Relax. We are going to ignore “Negative Numbers.” Use the down arrow next to “Symbol” to get you to “$ English United States.” (I know it doesn’t make any sense.) Highlight it. If you do, you will get dollar signs in front of your numbers.  If you click on something else, you will get the sign for Egyptian piasters or whatever. Now go to the bottom of the screen and click “OK.” That should give you your spreadsheet back with all your numbers converted to dollars, complete with commas in the appropriate places.

           Take a second to make sure you haven’t highlighted your boxes too far up. If you did, your year column headings will now look like dollar amounts. Now, left-click outside the highlighted area to get rid of the highlights, and Save again. Groovy.     

 

Calculating Spending Changes

           So much for the scut work. Now for the fun stuff. Take a minute to think about what your audience will want to know about this budget. First, most will probably want to know how much spending will go up if the proposed budget is passed. Obviously, we’ll want to show percentage increases at some point, but for now let’s show the change in dollars. So go to your D  column and click on cell D8. We’ll need to put a formula in this cell to show how much higher next year’s proposed expenditures are than this year’s. For arithmetic functions, the first instruction you need is the equals sign:   =.   Then, because you want to find out how much higher next year’s budget is than last year’s, you’ll subtract cell B8 from C8. So your command in cell D8 should look like this:   =C8-B8. Hit Enter. You should get a figure expressed in dollars.

           We’ll look at each category of expenditures next. To save time, spreadsheet programs let you copy the formula instead of retyping it into each cell. First, highlight (click on) the cell containing the formula, or the first result you got. Then copy it by clicking on the Edit menu at the top of your screen and clicking on Copy from that menu. Now click and drag to highlight the range of cells into which you want the formula copied (cells D3 to D7). Then go back to the Edit menu and click Paste. (You can also use the copy and paste icons at the top of your screen if you are familiar with that procedure.) You will see the solutions appear in each box that you’ve highlighted. Now do the same thing for the figures in the Revenues columns to get the change from this year to next in revenues.

           It’s time to remind you that if garbage goes in, garbage comes out. Spreadsheets are powerful programs, but they can’t do your front-end thinking for you. For example, if you told the program to subtract C8 from B8 instead of the other way around, you got some screwy negative numbers because you subtracted bigger numbers from smaller ones. Worse, once we get into percentage changes, you can set up a formula that gives you numbers that look plausible but are flat wrong. And if you copy one wrong formula over and over again, you simply multiply your errors. What fun.

           Now look at the changes from this year to next in dollar figures. Some interesting stuff.

 

Calculating Percentage Changes

           It’s time to figure those dollar changes as percentages. We’ll need to give the column a label, so type “Pct. Change” in cell E1 (you might have to widen the cell). Next, go to cell E8. Your formula for percentage change is  =D8/B8. When you type that into E8 and hit Enter, you should get the percentage by which total expenditures will go up next year, but the percentage will be expressed as a decimal. We’ll convert it in a minute. 

           Remember also that the formula to get the percentage change from one year to the next is to take the dollar difference between years, shown in cell D8, and divide it by this year’s figure, shown in cell B8. So dividing cell D8 by cell B8 will give you how much the percentage increase is in total expenditures for next year. That’s why we express the formula as =D8/B8. 

           Be careful not to divide cell D8 by cell C8, next year’s proposed figure. That would give you a meaningless figure; in effect, you’d be showing us the percentage the budget increased from next year to next year.   

           Now let’s change that decimal to a percentage. You know how: Highlight the cell, then right click to get your “Format Cells” choice. Left click on it, then select “Percentage” from the list of choices. Click on “Okay,” and you’re back to your spreadsheet with the change expressed as a percentage.

           Now copy the percentage change into cells E3 to E8 by using the same functions you used to get the changes expressed in dollars: Highlight E8, go to the Edit menu, select Copy, define the range of cells E3 to E7, then go to the Edit menu and select Paste. Holy moly!

           Now that you’ve got a handle on expenditures, let’s get the same percentage figures for revenues. Again, just highlight, copy, define your column of revenues and paste. More interesting stuff.

 

Sorting

           The Sort function on a spreadsheet program is valuable when you want to rank data, from biggest increase to smallest increase, for example. In our working sample we can pretty much eyeball those rankings, but when you’ve got dozens of categories, sorting can make your data much clearer. Let’s sort revenues and expenditures by percentage change.

           The first thing you’ll need to do is use the click and drag function to highlight the range of cells you want to sort. This requires a bit of thinking. If you decide you want to see the percentages changes from highest to lowest (descending order, in other words), you’ll obviously want to sort by the percentage column. But if you highlight only the cells in column E, you’ll get bad data. Here’s why: Your row headings (Police, Fire, City Manager and so forth) will remain where they were. So will the figures for those headings. But because you’ve told the spreadsheet program to rank only the percentages, the percentages will be shuffled into highest-to-lowest order. So you’ll wind up at the top with a percentage that might originally have been in the fourth row down, and it will now be next to a category and dollar figure it has nothing to do with.

           What you need to do, then, is to highlight the whole range of cells in Expenditures, A3 to E7, and then tell the computer you want all those sorted only by the percentage column. Again, the spreadsheet program is smart enough to do that, once you tell it to. It is not smart enough to understand that that’s what you want it to do if you give it vague instructions.

           So click and drag to highlight all cells from A3 to E7. Notice we are not highlighting the Total Expenditures category, because it would make no sense to rank it when you’re looking for the differences between individual categories.

           Now click on the Data function on your menu bar up top. You’ll get a box listing your choices. “Sort” is the first one. Left click on it. You’ll see a “Sort by” slot at the top. Use the arrow to scroll down to “Column E,” because that’s the column you want to sort all the others by. Left click to select “Column E,” then click on the “Descending” button next to the “sort by” slot, because you want the program to rank the percentage changes highest to lowest.  Ignore the other slots, which are labeled “Then by,” and the buttons next to them. Now click on “OK.”  You should see the categories, dollar figures and percentages shuffled until Expenditures are ranked by highest to lowest percentage change. Voila! Now do the same for the Revenues category.

           Save your data and examine them for a minute.

 

Inserting Columns

           With figures this interesting, it’s hardly time to stop analyzing this budget. Let’s find out what percentage of revenues is coming from each source, and what percentage of expenditures is going for each service.

           To do that, you’ll first have to insert a column. Move your pointer to the top of Column D and click. Then go to the Insert menu on your toolbar and choose Columns. Click on it to insert a new Column D (the spreadsheet will re-label your columns automatically). Go to the top of the column and label the cell “Pct. Next (for next year’s) Total.”

 

More Percentages

           Remember that we’re trying to find out what percentage of total revenues will be raised from each category. To do that, we’re going to divide one category by the total. Go to cell D11 and type =C11/$C$15. Notice that we’ve added dollar signs on either side of the second C. You need to do that because we’re going to copy the formula to the rest of the cells in the column. When you divide each of a range of cells by a single cell, the copying function won’t work right unless you remember those dollar signs.

           When you hit Enter you will see the change expressed as cents. That’s because the program is reading a decimal change, not a percentage change, and then trying to express that decimal in dollars.  Go ahead and highlight, copy and paste to calculate all your revenue changes.  Then select a cell, right click to get “Format Cells,” choose “Percentage,” click “OK,” and then copy it to all the other cells to get your change expressed as a percentage. Now create a “Pct. Current Total” column next to Column C and do the same calculation for current year revenues. Then do the same for the expenditures side of both budgets, using your Copy/Paste function.

 

=SUM

           Let’s check a couple more things. Excel allows us to take some shortcuts that might lead to interesting data. The most common one is =SUM. If you want to check whether the city’s arithmetic in the Total Revenues cell for the proposed year is right, for example, you could type = D11+D12+D13+D14. Boooooorrrrinnnggg. But you can get the same result if you type =SUM(D11:D14). Sing Hallelujah.

           OK, let’s do that. In Cell D16 type =SUM(D11:D14), then hit Enter. Do the same for the current year’s revenues and for both years’ expenditures. (You can’t use the copy/paste function here, though, because you are dealing with distinct commands, not just copying a function. Be careful. You might decide to try it anyway, and you might get plausible-looking numbers. They’re bogus.)  If you like, you can give your rows a heading such as “Check” to remind yourself that you’re checking the city officials’ math.

           Based on what you see, you might want to create one more label, in row 17. Call it Difference. Then, in cell B17, subtract the city’s total revenue figure, shown in cell B15, from your total revenue figure, in cell B16. To do that, use the formula we used earlier,  =B16-B15. Hit Enter. Do the same in cell D17 for the proposed budget’s revenues.  

           Now that you’ve got all your data, save your spreadsheet program once again, and go on to the next part of this exercise.

 

Guide questions

           Unless your instructor calls for them, you don’t need to hand these answers in. Use them as a guide to help you organize and write your story on Valleydale’s proposed budget. You might not use all the answers in your story.

           1.   Do the revenue totals for the current and proposed budgets check out? Do the expenditures?   

           2.   What is the city’s total projected increase in expenditures (in dollars) from the current year to next year?

           3.   Which category shows the biggest increase? How much was it?

           4.   Which category shows the smallest increase? How much?

           5.   What was the percentage increase in total expenditures?

           6.   Where were the two biggest percentage increases by category of expenditures?

           7.   Which category shows the smallest percentage increase?

           8.   What was the city’s total increase in revenues (in dollars)?

           9.   Which revenue category shows the biggest increase? How much was that?

          10. Which category shows the smallest increase? How much?

          11. What was the percentage increase in total revenues?

          12. Where were the two biggest percentage increases by category?

          13. Which category shows the smallest percentage increase?

          14. How big was the increase in user fees when expressed as a percentage increase over the previous year? 

          15. What percentage of its total revenues would the city get from property taxes next year? 

 

Interviewing the City Manager

           The following are on-the-record responses from Valleydale City Manager Don Prentice to your questions about his proposed budget: 

           Q: What do you see as the priorities in next year’s budget?

           Prentice: It has been a very difficult year for us financially. Expenditures are always rising, and this city is particularly committed to staying ahead of the curve in law enforcement. Our citizens need to be safe.

           Q: But our analysis shows that your law enforcement budget would go up by only 1.5 percent. The budget for your own office, meanwhile, would nearly double.

           Prentice: You’re showing your ignorance. In terms of real dollars, the increase for my office is insignificant. The budget for the city manager’s office and for city council are a very small percentage of the total budget. Compared to the actual dollar increases for the police, the dollar amounts of increases in both the city council and city manager budgets are not worth worrying about. Next question.

           Q: How will you fund the proposed increases?

           Prentice:  We’re very fortunate that we’ve been able to hold the property tax increase to just 9 percent.

           Q: Excuse me. Our figure is different, about a 10.5-percent increase.

           Prentice: What do you mean, your figure is different? You’re obviously mistaken, and if you want to embarrass yourself in front of your audience, that’s your business (laughs).

           Q: Aren’t you using the wrong base year to compare —

           Prentice: Look, we are professional municipal managers. We know what we are doing. You don’t. It’s as simple as that.

           Q: I see a substantial increase in what you plan to collect in user fees. What are user fees?

           Prentice: Huh. Believe it or not, user fees are fees charged to users. We think that’s fairer than taxing everybody to pay for that stuff.

           Q: Could you give us an example?

           Prentice: Hold your horses. I’m getting to that.  For instance, we have parks in some of our low-income areas. Why, you wouldn’t believe how those people take advantage of that. Some of those kids are in those parks all day, every day, and they don’t pay a cent for it.

           Q: But if you start to charge people to use the parks, won’t that prevent many of them from using them? And aren’t the ones who will suffer some of the people for whom those parks were built in the first place?

           Prentice: One question at a time. First, those parks were built for everyone, not just one strident constituency. And, it doesn’t matter who you are — rich, poor, in-between, black, white, purple. I think that if they use it, they should have to pay for it, so we’re proposing a $1 a day per person charge for using our city’s parks. And user fees are only a very small part of our budget, really. If you look, you’ll see that the increase is actually very small, just a 4-percent adjustment, from 8.5 percent of our total revenues to 12.8 percent.

           Q: That would be a 50-percent increase, not 4 percent. And as an actual increase from what you charged last year —

           Prentice: You know, you remind me of that old saying: Statistics don’t lie, but people lie with statistics.  I’m sure you’ll find a way to spin these figures to fit your newspaper’s agenda.

           Q: Let me ask you about another area. For both the current budget year and the proposed budget, our analysis shows a substantial discrepancy between revenues and expenditures. You’ve got about $2.5 million more in revenue than you will spend this year, and next year is off in the same direction by about $2.1 million. There is a total over the two years of about $4.6 million in unaccounted-for revenue.

           Prentice: Again, your math has got to be wrong. The total revenues for each year do add up. There is no discrepancy. (Sighs) This is what happens when you give a reporter a pocket calculator.

           Q: We used the Microsoft Excel computer spreadsheet program for our analysis.

           Prentice: Well, if you news people are using a computer program designed for experts, that’s your problem. Garbage in, garbage out. I am trying to emphasize how concerned we are for the citizens of this community as evidenced by the size of our police budget — more than $1.4 million next year — and you are harping on some imagined discrepancy of a few million dollars.

           Q: Excuse me, Mr. Prentice, but with all due respect, this is not an imagined discrepancy. Our analysis shows —

           Prentice: You think we are hiding $2 million a year? I don’t have to answer ridiculous accusations like that. You’re getting very close to libelous accusations. I’d be very damned careful if I were you. (Hangs up.)

 

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