POLITICAL SCIENCE 353, SPRING 2020 GOVERNMENTAL BUDGETING AND FINANCIAL ADMINISTRATION

Dr. Roy T. Meyers

Class: Mondays and Wednesdays, 2:30-3:45, Sondheim 114

Office Hours in 318 Public Policy: Mondays and Wednesdays, 1-2:15, and by appointment, in person or by phone. email: [email protected]

Course Approach

This is a course on how governments acquire and spend money. People often think that budgeting is a dry and boring subject. In fact, it’s exactly the opposite. Though some of the field is technical, budgeting actually involves fundamental issues of public policy, management, politics, and economics. We will learn about these issues by consulting budget documents and by discussing current controversies. Given this emphasis on current events, the course syllabus will be a “living” one--some readings will be updated so we can focus on recent developments.

By the end of the course, students who complete course requirements should be familiar with important concepts and theories of the budget process at the federal, state, and local levels of U.S. government. They will also have learned about current budget policy issues and improved their writing skills.

Preparation and Participation

As budgeting is my main research and public service area, I’m capable of lecturing on these topics for many more hours than we have for the course, and you would learn something from that approach. But while I will lecture at times, most classes will be devoted to guided discussions. Note that in general, I don’t use Powerpoint slides, as they can lead students to be passive and thus learn less. While I will facilitate discussions to emphasize certain concepts and facts, you should take notes through class periods as important information is revealed through class discussion. You will find that these notes will be helpful on assignments as we proceed through the semester, and be absolutely necessary for doing well on the two quizzes you will take. These quizzes will count for 20% of your course grade.

At the start of the course, I will assume that you have no familiarity with government budgeting. I won’t assume, however, that you are no-nothings. Students in the class include majors in political science, financial economics, health policy, social work, and other majors; expertise from these fields, when shared in class discussions, will allow you to learn from each other. For you to benefit from the discussions, and do well on writing assignments, you must complete and think about the assigned readings prior to class. I will pop a quiz on the class if it is apparent that assigned readings have not been completed.

All of these readings can be accessed from the course Blackboard (Bb) page, with the exception of the one required text:

Andrew Kleine, 2019. City on the Line. Lanham: Rowman and Littlefield.

Blackboard also includes all the displays and links used in class. You should also pay some attention to the news.

I expect that you will regularly attend and participate in class. Class will start promptly at 2:30, and you should not be tardy on a regular basis. Writing assignments are due at the beginning of class; don't skip class time finishing an assignment.

Throughout the semester, we will follow the rules of academic freedom. I hope that you will express your values as strongly as you would like, and respect the rights of others to do the same. I will express my own views at times, and when you disagree, I encourage you to challenge my position; you should be absolutely confident that I will not penalize you.

The counterpart to this encouraged diversity of expressed opinions will be the academic exercise of analyzing our differences in reference to the concepts and methods covered in the course. My hope is that everyone--including myself--will end the semester having reconsidered some beliefs in light of findings from research and the comments of each other.

General class participation will be 15% of your final grade. A variety of activities count as class participation: careful listening, speaking in discussions, engaging in group work, roleplaying, and asking questions if you are confused.

You should use your computer only for class work--otherwise, you should shut it down. You should use cellphones/texting only for emergencies.

Writing Assignments

This class is designated as a “Writing Intensive” class. Why writing intensive rather than math intensive? Though number crunching is important in budgeting--and we will spend some time interpreting budgetary data--many people who work on budgets spend more time learning the details of issues, policies, and operations, and then writing to justify, explain, and advocate.

Being able to write succinctly is a very important skill for your career and your involvement in

2 public life. Each of the writing assignments focuses on an important element of good writing, which is identified in italics. For each of these assignments, you will likely find it helpful to begin by brainstorming ideas about the readings. Select from those thoughts to write a first draft. Then analyze how you might improve this piece, and revise it--almost all good writing is the product of revision to both substance and style. You should polish your papers by proofreading and copy editing before you hand it in. You should also incorporate relevant information from readings into these writing assignments.

See the Blackboard link on writing assignments for a checklist that can help you to write excellent assignments, for the link to the UMBC Writing Center, and for additional writing advice.

Ten short writing assignments will be 65% of your course grade. Your submissions should be about two double-spaced pages long using 12pt font and regular margins. Honor the idea that “every word counts”: use the full space that you are allowed, but don’t waste that space with irrelevant or redundant material. Some writing assignments include prompts that focus on a characteristic of good writing from the aforementioned checklist--make sure you respond to them.

Submit these assignments to [email protected] by 10am on the morning of class.

Any violations of academic integrity will be grounds for failing the course and will be reported to UMBC authorities. To avoid being charged with plagiarism, when you draw on readings other than required ones, you must cite them. If I find that you handed in work that you did not produce, you will fail the course. I am sorry to report that students have failed this course because of plagiarism; I hope this mistake is never again repeated in this course. For more info, see my web page on plagiarism at: http://userpages.umbc.edu/~meyers/plag.htm.

Class Schedule: Topics, Readings, and Assignments

1/27 Course introduction

1/29 How much do U.S. governments spend, tax, and borrow?

John Joseph Wallis, 2000. “American Government Finance in the Long Run: 1790-1990,” Journal of Economic Perspectives, 14: Winter, 61-82.

Assignment 1 (6%): Details on Blackboard, using the Urban Institute’s website “What everyone should know about their state's budget.”

3 Part I: Federal policy and process

2/3 Federal budget concepts, and current projections for the 10-year horizon

Congressional Budget Office, 2020. The Budget and Economic Outlook, Fiscal Years 2020 to 2030. Chapter 1.

2/5 Is the current budget situation consistent with public opinion and election promises?

Andrew Kohut, 2012. “Debt and Deficit: A Public Opinion Dilemma,” Pew Research Center for the People and the Press, June 14.

Committee for a Responsible Federal Budget, 2016. “Promises and Price Tags: An Update,” September 22.

David Leonhardt, 2018. “The Democrats Are the Party of Fiscal Responsibility,” The New York Times, April 15.

Assignment 2 (6%): Answer the question for this class based on the readings for this week. In your paper, clearly state the main point you want to make (without using the phrase that “my main point is. . .”).

2/10 Basics of the federal budget process, with an emphasis on health policy; first decades of the Congressional Budget Act

Roy T. Meyers, 2014. “Budgeting and Health Care Policy (1970s-Present),” in Thomas R. Oliver, editor, U.S. Health Care and Health Care Policy, Thousand Oaks, California: CQ Press, 111-125.

2/12 Continuation on the basics of the budget process; its implosion in recent years

Roy T. Meyers, 2014. “The Implosion of The Federal Budget Process: Triggers, Commissions, Cliffs, Sequesters, Debt Ceilings, and Shutdown,” Public Budgeting and Finance, 34: Winter, 1-23.

2/17 Trump’s budgeting-related gambits: “The Wall” and Ukraine Security Assistance

See readings linked on Blackboard

4 Assignment 3 (6%): Prepare two pages of talking points in a “bullet point” format for a class debate about how Congress has responded to Trump’s gambits. The talking points should be succinct statements (aka “sound bites”), meant either to convey factual information or to evoke emotional responses. You should also anticipate arguments in opposition to your views and attempt to counter them.

2/19 Beyond gridlock? The 21st Century Cures Act; dead earmarks; the FY20 appropriations bills

Jennifer Steinhauer and Sabrina Tavernise, 2016. “$6.3 Billion Measure Aims to Cure Ailing Health Care Policies,” The New York Times, November 28.

Kate Ackley, 2019. “The Dead Earmarks Society,” Roll Call, February 15.

Emily Cochrane, 2019. “Congress Approves Spending Package to Avoid Shutdown, Clearing It for Trump,” The New York Times, December 19.

2/24 Budget process reform

Steve Redburn and Paul Posner, 2015. “Portfolio Budgeting: How a New Approach to the Budget Could Yield Better Decisions,” Brookings Institution, September.

Philip Joyce and Roy T. Meyers, 2020, “The Problem and the Process Are Both Problems: Why the Joint Select Committee on Budget and Appropriations Process Failed,” working paper.

Quiz 1 (10%)

Part II: Introduction to state and local budgeting, outcome budgeting

2/26 Incrementalism vs. outcome budgeting

Kleine, pp. 1-52

5 3/2 Local government financial sustainability; bond ratings and the credit markets; overview of MD executive budget process

Monica Davey and Mary Williams Walsh, 2013. “For Detroit, a Crisis of Bad Decisions and Crossed Fingers,” The New York Times, March 11.

George Mason University Municipal Sustainability Project, 2013. “Baltimore Executive Summary,” and “San Bernardino Executive Summary.”

Maryland Budget and Tax Policy Institute, 2008. Maryland Policy Reports, June.

3/4 Outcome budgeting continued

Kleine, pp. 53-106

Assignment 4 (7%): Search through the Baltimore City 2020 budget detail volumes to choose a service that interests you. Describe how well the document answers the three questions mentioned in Kleine, p. 75, question 3 (how much? how well? better off?). Using chapter 4’s performance/priority matrix on p. 100, identify in which quadrant you would tentatively place this service.

3/9 Recessions and subnational procyclical budgets; the federal budget and stabilization policy; leadership and cutbacks

Warren G. Deschenaux and David B. Juppe, 2015. “It’s Always Something: Maryland’s Path Through the ‘Great Recession’,” Public Budgeting and Finance, 35: Summer, 106-125.

Kleine, pp. 107-129

3/11 Maryland’s current budget; should MD “fully fund” Kirwan?

Readings to be determined

Assignment 5 (6%): Working in groups, analyze whether the state should commit itself to spending the funds requested by the Kirwan commission for the next decade. Your group should collectively edit your work. For this class, each group’s report will be posted to Blackboard, and will be reviewed by another group. Use at least four paragraphs, and organize those paragraphs into a logical order. Do NOT use the five paragraph essay form that in the last paragraph simply restates the previous paragraphs; instead, use the space that would otherwise

6 summarize what you wrote to provide additional information relevant to your argument.

Spring Break

Part III: OK Boomer?

3/23 Federal long-term projections and policy options

Congressional Budget Office, 2019. The 2019 Long-Term Budget Outlook. June 25, pp. 1-31.

Lori Montgomery, 2014. “Forget the national debt. The new budget threat is climate change,” The Washington Post, September 19.

3/25 Intergenerational equity and Social Security

Jim Tankersley, 2012. “Generational Warfare: The Case Against Parasitic Baby Boomers,” National Journal, October 4.

Assignment 6 (6%): On Blackboard, open the simulator on Social Security, and make at least two policy changes, printing the results to bring to class. Note that in making these choices you need not close the financing gap entirely, or at all. For the writing assignment, interpret your choices in light of the arguments made in the Tankersley article. Pay particular attention to your “lede”--the first sentence or a short first paragraph--by writing an interesting statement that will encourage readers to complete the whole piece.

Part IV: Taxes and Economic Development Subsidies

3/30 Tax policy basics: bases, rates, incidence

Selected pages from The Tax Policy Center’s Briefing Book

Institute on Taxation and Economic Policy, 2018. Who Pays? October. Sections on Maryland, pp. 72-3; Washington State, pp. 126-7.

4/1 Tax predation, revolts, and wishful thinking

KPBS News, 2010. “The Legacy of Prop 13.” San Diego, Video.

7 Chris Suellentrop, 2015. “The Kansas Experiment,” The New York Times, August 5.

Michael Mazerov, 2016. “Kansas’ Tax Cut Experience Refutes Economic Growth Predictions of Trump Tax Advisors,” Center on Budget and Policy Priorities, August 12.

Mitch Smith and Julie Bosman, 2017. “Kansas Supreme Court Says State Education Spending Is Too Low,” The New York Times, March 2.

William G. Gale, 2017. “What the Kansas Tax Cut About-Face Means,” TaxVox, June 14.

Jim Tankersley, 2017. “Kansas Tried a Tax Plan Similar to Trump’s. It Failed.,” The New York Times, October 10.

4/6 The Tax Cuts and Jobs Act; 2020 candidates’ positions on taxes

Eric Toder, 2018. “1986 RIP: Different Tax Rates for Different Income Sources,” TaxVox, March 16.

Natalie Kitroeff, 2017. “In a Complex Tax Bill, Let the Hunt for Loopholes Begin,” The New York Times, December 27.

Tax Policy Center, 2020. Website on “Where the 2020 Presidential Candidates Stand on Tax Policy”--skim through this

4/8 Tax evasion

Your pick: Trump or Apple

David Barstow, Susanne Craig And Russ Buettner, 2018. “Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father,” The New York Times, October 2.

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Charles Duhigg And David Kocieniewski, 2012. “How Apple Sidesteps Billions in Taxes,” The New York Times, April 28.

Jesse Drucker and Simon Bowers, 2017. “After a Tax Crackdown, Apple Found a New Shelter for Its Profits,” The New York Times, November 6.

8 Daisuke Wakabayashi and Brian X. Chen, 2018. “Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S.,” The New York Times, January 17.

Quiz 2 (10%)

4/13 Tax administration; tax expenditures

Paul Kiel and Jesse Eisinger, 2018. “How the IRS Was Gutted,” Pro Publica, December 11.

Stephanie Saul, 2012. “Public Money Finds Back Door to Private Schools,” The New York Times, May 21.

Erica L. Green, 2017. “In Some States, Donating to Private Schools Can Earn You a Profit,” The New York Times, May 17.

Part V: Outcome budgeting, continued

4/15 Economic development subsidies

Louise Story, 2012. “As Companies Seek Tax Deals, Governments Pay High Price,” The New York Times, December 1.

“The Port Covington TIF: Did Baltimore ‘Protect This House?’,” 2019. Craig L. Johnson and Kenneth A. Kriz, eds. Tax Increment Financing and Economic Development: Uses, Structures and Impact, second edition. Albany: State University of New York Press, 83-99.

Jeff Ernsthausen and Justin Elliott, 2019. “One Trump Tax Cut Was Meant to Help the Poor. A Billionaire Ended Up Winning Big,” ProPublica, June 19.

Assignment 7 (6%): Assume you are an advisor to a candidate for the 2022 Maryland Governor’s race. Give advice on what the candidate’s stance should be on economic development subsidies--to increase, reduce, or eliminate them. Paying particular attention to word usage. If you are uncertain about whether a word you include in your draft is the best one, consult your dictionary and thesaurus.

9 4/20 Budget execution: controlling waste, fraud, and abuse; improving public understanding

David Fahrenthold, 2014. “Sinkhole of Bureaucracy,” The Washington Post, March 22.

Jennifer Barrios, 2019. “Fake invoices and gambling debts: How a county bureaucrat stole $6.7 million,” The Washington Post, February 21.

Kleine, pp. 131-147

4/22 Baltimore County outcome budgeting reform

Kleine, pp. 149-218

FY2021 budget request of the Baltimore County Executive

Assignment 8 (6%): Scan through the budget request to find an administration claim that is consistent with an idea described in this part of Kleine’s book. Describe the claim, supplying the relevant page number(s) in the budget. Then propose two questions that a county council member could ask the county budget director about the topic.

4/27 Capital budgeting; P3 in Maryland

Erin Cox and Luke Broadwater, 2017. “Under state law, opponents to Hogan's $9B toll lane plan have little recourse,” The Baltimore Sun, September 22.

Bruce, DePuyt, 2020. “Analysis: A Bumpy Road to a Highway Compromise,” Maryland Matters, January 7.

4/29 Budgeting for Maryland’s Behavioral Health Administration

Selected pages to be determined on spending for mental health services and opioid abuse prevention and treatment

Assignment 9 (6%): What changes, if any, would you make to the Governor’s budget request? Write one paragraph that can be expressed in one minute of talking--a so-called “elevator speech.” In your remaining space, provide additional details that could be used to respond to likely questions about your basic argument.

10 5/4, 5/6 Federal budget priorities role-play

The Fiscal Ship simulation

5/11 Final class; evaluation of The Fiscal Ship role play

Assignment 10 (10%): Prompt to be provided

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