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Chair's Column

ABFM Members:

I am happy to report that the membership overwhelmingly approved the recommended changes to the By Laws 47-6. The passage of these changes will allow ABFM to achieve greater visibility in ASPA as well as other venues where we need a voice. Click here to see the ratified amendments.

I also would like to take this opportunity to thank everyone who supports the organization. There is a lot of work that occurs behind the scenes and the executive council does yeoman’s work to ensure that the organization functions at the highest levels. So, please give the members a proverbial “pat on the back” when you see them. It was a pleasure for me to work with them. Last, I hope everyone had a great semester and I wish you the very best in 2015. See you in DC.

Charles Menifield
2014 Chair

SAVE THE DATE!
2015 ABFM ANNUAL CONFERENCE
OCTOBER 1ST-3RD
WASHINGTON MARRIOTT
State Budgets Show Improvement

State general fund budget revenue and expenditures will grow for a 5th consecutive year in FY 2015, with spending growth focused on addressing K-12 education and Medicaid issues. These findings and more were released in the Fall 2014 Fiscal Survey of States, released December 9th by the National Association of State Budget Officers (NASBO).

State government budgets for FY 2015 totaled more than $750 billion, 3% growth ($23 billion) compared to last year. Of the $23 billion in growth, $19.6 billion (85%) were applied towards primary (K-12) education and Medicaid coverage. Higher education spending increased $4.4 billion, while transportation expenditures only grew by $1 billion.

Overall revenues show an increase of 3% for FY 2015, though remain slightly below total expenditures. The gap was caused by planned cuts in state tax rates, contributing to $2.3 billion reduction in associated tax revenues.

Fund balance levels will decline to 7.3% in FY 2015, with the level adjusted to 4.8% when balance-rich states of Texas and Alaska are omitted. While consistent growth has returned, annual growth levels are still below historic averages. If necessary and mandated spending grows at faster rates, the potential for resources constraints in upcoming budgets will create a serious challenge.

Click Here to Review the Fiscal Survey Report
ABFM Hosts ASPA Budgeting Webinar

ABFM's Scott Pattison (NASBO) and Kenneth Hunter (City of Rocky Mount, NC) presented a webinar, "Challenges and Opportunities in State & Local Budgeting," for members of the American Society for Public Administration (ASPA) on December 9th. The session provided a basic overview of state and local budgeting processes, their interaction with the Federal government, and discussions of trends at the state and local levels. Data was shared from the Fall 2014 Fiscal Survey of States, presented by NASBO, and the 2014 Fiscal Conditions Analysis prepared by the National League of Cities (NLC).
 
FAF Developing Strategic Plan

Column Excerpt
By Teresa S. Polley, President & CEO
Financial Accounting Foundation


There’s a song on George Harrison’s last album—posthumously released—that features a thought-provoking refrain. It goes like this: “If you don’t know where you’re going, any road will take you there.”

The point, of course, is that if you don’t plot a carefully considered course for the future, you could, literally, wind up anywhere. That’s true for individuals. And it is certainly true for organizations. 

And that is the central reason that the Financial Accounting Foundation, the Financial Accounting Standards Board, and the Governmental Accounting Standards Board earlier this year began working with the FAF Board of Trustees to develop an updated strategic plan for the organization.

The goal was to establish clearly articulated, easily understood statements of our vision and our mission, accompanied by a list of our top priorities. Our plan was to use this as an opportunity to initiate an in-depth dialogue about these issues, not only internally, but also with our stakeholders, and then craft a high-level planning document to guide us as we move forward in the months and years ahead. 

After several months of work, we’re at a point where we would like to share a draft of this plan with you, our stakeholders—and we welcome your comments. Please feel free to share them with us by sending an email to: strategic.plan@f-a-f.org. Our expectation is that the FAF Board of Trustees will consider adopting the plan at the Board’s February 2015 meeting.

Click Here for the Entire Column

Click Here for FAF Strategic Plan Website
 

Census Releases 2013 Public Employment Report

On December 19th, the Census Bureau released their 2013 Annual Survey of Public Employment and Payroll. This report provides a comprehensive look at the employment of the nation’s state and local governments, as well as the federal government. It shows the number of government civilian employees and their gross payroll by governmental function. These governmental functions include, for example, elementary and secondary education, and police protection.
 

From the NASBO Budget Blog
Oil Price Shocks Should Benefit Most State Budgets; Pose Challenges for a Few

By Michael Streepey

Anyone who has filled up their gas tank in the past few months probably has noticed that fuel costs have gone down significantly. The price of oil has plummeted over the past six months, falling by more than 40 percent, from $115 a barrel to around $60 a barrel last week. Supply and demand factors are being blamed by some for the recent plunge in the price of oil. Production hasn’t been cut by the U.S. or Saudi Arabia, the world’s two largest producers, leading to a supply glut, despite slow economic growth and projections for less global demand in the future. As a result, the price of oil is now at a five year low. According to Reuters, “The Organization of the Petroleum Exporting Countries (OPEC), which accounts for a third of world oil output, sees 2015 demand falling to its lowest in more than a decade.”

State budgets may be impacted by falling oil prices in different ways. States that have large amounts of oil being produced in their jurisdiction will receive less in oil severance taxes, as a result of lower prices. Additionally, if production is cut due to unprofitability, oil severance tax collections may decline further. However, most states are likely to benefit from the recent plunge in oil prices. The additional savings at the pump is leading to more discretionary income for U.S. consumers this holiday season, potentially bolstering state sales tax collections. Although, spending on motor fuel only represents a small portion of total household spending, so the impact on other forms of consumption from cheaper gasoline is likely to be relatively minor. The latest consumer price index data from the Bureau of Labor Statistics (BLS) estimates that spending on motor fuels represents 4.8 percent of total household consumption.

Some articles have noted that cheaper gasoline will lead drivers to fill up more often and drive more miles. However, industry analysts have found that gasoline consumption (or demand) is relatively stable, despite fluctuations in price. This means that cheaper fuel will likely produce little additional motor fuel tax revenue to help support state roads and infrastructure. A few states that link the gas tax with the price of oil, such as Kentucky and Pennsylvania, will likely experience a decline in motor fuel tax collections. Kentucky transportation officials are bracing for a projected $129 million drop in motor fuel tax collections beginning in 2015, when the state’s gas tax declines by 4.3 cents per gallon. Kentucky’s method of linking the gas tax to the price of gasoline can be more volatile during an energy crash, but the practice has also allowed the rate to rise from 12 cents to 30.8 cents per gallon from 1993 to 2014.[1] During the same period, the federal gas tax has remained unchanged at 18.4 cents per gallon.[2] As a result, the federal Highway Trust Fund is again projected to face solvency issues by the middle of 2015. The recent drop in the price of gas has revived some hopes amongst transportation proponents that Congress will now have the needed votes to approve a federal gas tax increase.

Some states more heavily reliant on oil severance taxes, such as Alaska, New Mexico, North Dakota and Oklahoma may face budget challenges if the price decline in oil is sustained for a prolonged period. Texas and California, the number one and three oil producing states respectively, have greater diversification and scale to their economies, and are less likely to experience budgetary pressures from declining oil prices. According to the U.S. Energy Information Administration, “Crude oil is produced in 31 states and two offshore federal regions—the Gulf of Mexico and the Pacific Coast. Of those 33 producing areas, 10 supply more than 90% of U.S. output.” The United States is now the largest producer of oil in the world, although shale production is much more costly than oil produced in other parts of the world such as the Middle East. As oil prices fall, more expensive production operations, such as those involving shale in the U.S., may need to be curtailed to remain profitable, a dynamic that OPEC producers are hoping takes place so that their share of the world’s oil market does not shrink.

Click Here to view rest of this column

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ABFM is a research section of the American Society for Public Administration

About ABFM
We aim to promote the professional development of budgeting and financial management in the public and non-profit sectors. Embracing both theorectical and operational concerns, ABFM addresses issues in budgeting processes and practice in financial management.


Click here for membership information.
ABFM Board of Directors
 
2014 Chair
Charles Menifield
University of Missouri-Columbia

Chair-Elect
2015 Chair

Robert Kravchuk

Indiana University


Vice Chair
2016 Chair

Carolyn Bourdeaux
Georgia State University


Vice Chair-Elect
2017 Chair

Dan Smith
New York University


Immediate Past Chair
2013 Chair

Scott Pattison
NASBO

Secretary & Archivist
Meagan Jordan
Old Dominion University


Treasurer
Deborah Carroll
University of Georgia

Newsletter Editor

Kenneth Hunter
City of Rocky Mount, NC

Executive Committee
2012-2014 Term
Thad Calbrese, New York University

Helisse Levine, Long Island University
Dan Smith, New York University


2013-2015 Term
Ben Clark, Cleveland State University

John Gilmour, William & Mary
Kenneth Hunter, City of Rocky Mount, NC

2014-2016 Term
Christine Martell, Colorado-Boulder

David Matkin, University of Albana-SUNY
Zhirong "Jerry" Zhao, University of Minnesota

2015-2017 Term
Hai (David) Guo, Florida International University

Olga Smirnova, East Carolina University
Bryan Sullivan, State of Delaware OMB
Career Opportunities
Click Here for Job Postings

Director of Budget & Resource Analysis, Virginia Commonwealth University

Faculty, HR Management & Organizational Behavior, Northern Illinois University

Associate Vice President for Budget, Planning & Analysis, Columbia College Chicago

Assistant Professor/Research Associate, Center for Public & Nonprofit Management, University of Central Florida

Professor/Director, Center for Public & Nonprofit Management, University of Central Florida

Assistant Professor, Public Budgeting & Finance, North Carolina State University

Assistant/Associated Professor, Public Administration, Governors State University


Members with announcements can have them posted for free. Email them to kenneth.hunter@nclgba.org.

Call for Papers

PF&M Special Issue on Public Pensions (Due 1/31/15)
Contributions for Teaching Database Accepted

Our Teaching Database is once again available online, and we are now accepting submissions for new material we will add to the database over the summer.  This project serves as a collection of teaching materials from graduate level courses related to Public Budgeting and Financial Management.

Items that will be considered include: course syllabi, reading and textbook lists, assignments, student project ideas, lectures, handouts and reading assignments.

Submissions should be made electronically to Kenneth Hunter, kenneth.hunter@ nclgba.org. The subject of the email should include "ABFM Teaching Database Submission," and the message should include a brief description of the submitted items (attached files).

Open source data sets will also be considered.


Click Here for the Teaching Database
Resources






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