The long-range financial strategy created the perfect context for assessing the long-range financial implications of the price of government and the items that typically lead to expenditures in a long-range forecast.
The Price of Government, by David Osborne and Peter Hutchinson, the book that suggested both the price of government revenue model and budgeting for outcomes, suggests that a long-range financial plan should follow the "five by five" model--projecting five numbers (revenues, expenditures, the net difference between revenues and expenditures, beginning fund balance, and ending fund balance) over five years.
A complete description of "The Price of Government
: Budgeting for Outcomes" as well as registration information are also available on the NLC website.
Hence the term "price of government." The authors propose that governments find the "right price" through a historical review of taxes and fees, then prioritize and determine services to be purchased at this price.
For example, the authors' state, "Frightened by the economic damage done by the Reagan-Bush deficits, voters sent a clear message in the 1992 election," suggesting the price of government had fluctuated too low and the correction was reflected in the election of Bill Clinton.
Determine the Price of Government
(How much revenue will be available?)
If the price of government
goes too high, incumbents get ousted or anti-tax initiatives get passed.
This so-called "price of government"--it's actually the sum of all taxes and fees divided by the area's aggregate personal income--functions much like a thermometer.
If it gets too low and the services people really want (police, roads, health, schools, etc.) start to slip seriously, citizens start pushing the price of government back up by electing more free-spending officeholders or passing referendums for added services.
The Price of Government
goes beyond traditional left and right wing politics.
The price of government is the amount citizens pay in local taxes, fees, and charges from each dollar of personal income.
There is no one "right" price of government. Indeed, each jurisdiction approaches this issue differently.