Introduction

A city’s operating budget fulfills several important functions. It is a tool for financial management, a plan for providing services, a way to rationalize how tax dollars will be spent, and a mechanism for communicating policy preferences and goals to the public. This single document contains the city’s financial, operational, and political plans for the next 12 months, making the budget one of the most important documents produced by a local government.

One overriding function of the budget is as a tool for communicating with the public. The budget communicates the city’s fiscal and management policies and explains to residents how programs and services will be funded. Unlike private-sector organizations that are responsible for reporting profits and losses, public entities such as municipal governments are primarily responsible for accountability in spending public tax dollars. Public funds must be used as efficiently and effectively as possible to provide programs and services. The budget document is a statement of the city’s priorities for providing the services that the public demands.

The budget cycle is a continuous process that requires the mission, values, goals, and priorities to be translated into programs and services. Budgeting requires the legislative body and executive branch to work together to decide on the most efficient and effective way to spend a city’s revenues. The budget process involves conflict resolution, competition for scarce resources, and developing alternatives and compromises. Although each city has its own unique process for budget development, there are common elements in most budget processes. To better understand the budget process, it is important to be familiar with the terminology used in budgeting, the laws that govern the process, and the procedures that most cities in Georgia generally follow.

The purpose of this guide is to provide an overview of the budget process, the laws that affect budget preparation and adoption, and the process of preparing and adopting a budget. It is designed to give newly elected officials and those just learning about the municipal budget process general information about the roles of various appointed and elected officials in the budget process and to describe the steps involved in adopting a balanced general fund budget. Throughout this publication, we reference examples of forms, documents, graphs, and charts from actual city budget documents.