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Posted on March 24th, 2013, by

The budget plays an important part in the economic and social development of any city. In fact, the budget defines expenses and revenues of a city and, therefore, defines policies conducted by the city authorities and economic development of the city. However, often the local authorities face problems while developing the city budget because they need to use the available funds effectively and often they have to find new resources to fund existing social and other programs and projects to maintain a steady development of the local community. In this respect, it is possible to refer to the example of the budget of Kingston, Ulster County, the State of New York. The city budget is extremely important because it defines the expenses and revenues of the city and, therefore, affects the development of the local economy and business, provision of social and health care services, and other socially important issues related to the city development.

First of all, it is important to analyze whether the budget message present an adequate overview of the entity and its financial position. In this regard, it should be said that the city uses the accurate accounting system and process the data related to the city budget with the help of the automated system. In such a way, the city attempts to reduce the risk of error and miscalculations. In this regard, the budget message is crucial because it defines the strategy the local authorities will use to define revenues and expenses of the budget and sources of funding as well as the accounting system used to manage and control the budget. In fact, the budget message implies the clear definition of the strategy of the budget development and the city budget of Kingston, New York, has a clear message, which stresses the key directions in the development of the city, including health care services, education, transportation system, and development of the recreational area in the city along with the stimulation of small and medium size businesses.

In such a context, it is quite natural that education is the service area that accounts for the greatest percentage of the operating budget along with the accounts for the maintenance of local health care services and transportation system. In fact, the city budget provides substantial resources for the maintenance and development of education, health care and transportation system of the city. In such a way, local policy makers attempt to increase the quality of life of the local population and create favorable conditions for the development of the city and its economic growth. The budget does not provide the full information suggesting why these service areas are the largest but still the budget provides implications that explain such attention of the local authorities to education, health care and transportation system. To put it more precisely, the local authorities view health care, education and transportation system as strategic for the development of the city and its economy. The support of education and health care is essential for the retention of gifted young people in the city and, thus, prevents the brain drain from the city to New York or other large cities of the US. Human resources play a particularly important role in the development of the local economy because they can develop new businesses, introduce innovations and stimulate the fast economic growth of the local community. At the same time, the transportation system is essential for the development of trade and local infrastructure, which also contribute to the economic growth of the city. In addition, the development of the new, effective transportation system is supposed to improve the environmental situation in the city and local community because the local authorities attempt to move the transit transport outside the city and decrease the traffic within the city stimulating the development of pedestrian zones and other environment-friendly areas.

At this point, it is worth mentioning the fact that within the defined service areas the local policy makers focus on human resources and innovations as the major categories of expenditure that account for the greatest percentage of the areas’ budget. To put it more precisely, the local authorities attempt to develop local human resources and stimulate the introduction of innovations in health care services, transportation system and education. The quality and professional level of human resources is viewed by the local authorities as crucial for the development of the local economy and community. Therefore, the city budget focuses on the retention of well-qualified professionals in the city through stimulation of rising wages to professionals working in health care and education to stimulate their further work in the city. In addition, the city has developed some programs, which stimulate the introduction of innovations in health care, education and transportation. In such a way, the local budget stimulates the introduction of innovations, which bring positive effects for the local community because innovations in the field of health care services, education and transportation improve their quality and often help to decrease costs spent by the local population and the city budget on the maintenance of the health care, education, and transportation system in the city.

In actuality, health care system, education and transportation system have over $4.5 million funds, which are balanced and quite similar in terms of the sources of revenue, especially in regard to the health care system and education. In this regard, the funding of transportation system differs consistently because the main source of funding for the transportation system and programs in terms of the city’s budget is the fuel tax, whereas the health care system and education are fund due to property and other taxes mainly. As a result, the city’s budget has similar revenue sources for the health care system and education and different for the transportation system.

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