TycheDataGuide:BudgetData
What is Budget Data?
Government budgeting is typically a yearly exercise where a budget is proposed, discussed, edited and then formalized as an approved budget. Most governments present their proposed and approved budgets as "budget books". Similar to audited financial statements, budget books contain unstructured information found in a pdf that is a mix of narrative and data tables.
Budget book tables will usually contain, for every component of the budget, proposed or approved revenue and spending for the upcoming year, similar approved numbers for the current year, and approved and actual numbers for the preceding year. These additional columns of data provide context and content that can be used for analysis to understand trends and the accuracy of the budgeting process.
Where does it come from?
Budget data and budget books can be prepared by many different entities within a government, however in most governments there is a budget office that runs the budget process and prepares the budget book.
What are the primary and secondary data elements?
A typical budget book will present revenue and expenditures cross-government, by department, and by initiative. A budget book will have a narrative that will describe macroeconomic forces (e.g. demographic shifts), headwinds (e.g. increasing healthcare costs) and tailwinds (e.g. new state funding) that are being taken into consideration when budgeting.
Look for several breakdowns of expenditures:
- by category - Wages, FICA, Debt service
- by department - Traffic engineering, IT, Audit office
- by detail within department - department-specific salaries, capital purchases, benefits
What are questions you can answer with budget data?
- What are the government's revenue components (their sources and sizes) and how do those components change over time?
- What are the government's expense components (their sources and sizes) and how do those components change over time?
- How are any new revenue and/or expense components sized and explained?
- How is the overall budget changing over time?
- Which revenue and/or expense components are the most stable or volatile year-to-year?
- Which revenue and/or expense components are the most predictable, when measuring budget to actual amounts in past years?
- There are some budgetary components that are challenging to predict - revenue streams from fees, expenditures on overtime - how are these sized and explained?
- What is the balance between fixed and discretionary spending in a budget?
- What are the initiatives and goals of the government for the upcoming year and how are they funded?
Tips and tricks for using budget data?
- Budgets are dense and may not be accessible to the lay person. There are different data visualization methods - graphs, Sankey diagrams - that can make the data more accessible
- Pay attention to shifts in how revenue and expenditures are categorized. For example, Federal aid may be presented in one category in one year, and another category the following year.
- If you are comparing multiple years of budgets you can look at the year-to-year change in any expense or revenue line, and you can use other techniques that make the stable and volatile lines stand out. For example, for any given line over N years you can identify the median or average, and then calculate a standard deviation to identify volatility/stability