The budget analyst: skills, training, and compensation.

• Author: Michel, R. Gregory
• Position: Changes in budget analyst skills for public administration

To be effective in modern government organizations, budget analysts need to possess the right combination of personality traits, analytical and communication skills, and knowledge of government finance and operations.

Increasing demand for public safety and social services, the weak economy, and a "no new taxes" political environment have placed many governments between a rock and hard place. Although elected officials are ultimately responsible for making difficult budget balancing decisions, they could not make informed decisions without the analytical skills, political savvy, and creativity of the budget analysts working behind the scenes. Fortunately, budget analysts today are better trained, employ more sophisticated techniques, and have more powerful technology at their disposal than ever before.

Adapted from a new GFOA publication entitled Organization and Design of an Effective Budget Function, this article takes a rare look at the job of one of the most critical players in public budgeting: the budget analyst. The first part of the article discusses the evolution of state and local government budgeting and identifies the skills, knowledge, and abilities that budget analysts should possess in order to succeed in today's environment. The section that follows addresses the related issues of training and retention, and the article concludes with a discussion of compensation for local government budget analysts.

Changes in State and Local Government Budgeting

Public budgeting has undergone several dramatic changes in the past 40 years. During this period, the complexity of budgeting has changed, the tools and methods of budgeting have changed, and even the types of people doing the budgeting have changed. This section describes five major changes in state and local government budgeting over the years and how these changes have affected the work of budget analysts.

Advances in Technology

Not long ago, budget office staff spent much of their time retyping budget drafts, performing monotonous manual calculations, and rechecking numbers. Advances in computer hardware, network computing, spreadsheet software, and word processing software have eliminated much of the clerical work that used to be performed in the budget office. Analysts now have more time and better tools for analysis than ever before. At the same time, technology has increased expectations of what the budget office can do. One veteran finance officer observed that despite the expectation that computers would make tasks easier and employees more productive, the computer has not reduced work, but rather expanded it. Because of advances in technology, there is no limit on the perceived analytical capabilities of budget analysts. (1)

Expanded Scope and Complexity of Government

Since World War II, local governments have experienced a dramatic expansion in the size and scope of their responsibilities. From 1957 to 1992, state and local government expenditures per capita increased 153 percent even after adjusting for inflation. (2) In addition, local government's scope of responsibility has expanded from police, fire, and streets to tackling complex human services issues, coordinating economic development projects, and managing cultural and recreational facilities. The increased size and scope of local government directly affects the complexity of the budgeting function. Budget staff now oversee larger budgets and more programs, and perform more complex analyses.

"No New Taxes" Political Environment

Although the responsibilities of state and local government have grown, the potential resources available to budget analysts have shrunk. Because of a change in the political climate, elected officials (and the voters they represent) are increasingly resistant to tax increases. This "no new taxes" political environment has created a demand for budget analysts who are not only technically proficient, but also politically savvy and creative. This type of budget analyst has the creativity to locate new, politically acceptable sources of revenue and to find ways of doing more with less through privatization, alternative service delivery, and increased efficiency.

New Methods of Budgeting

Innovations in budgeting methods, such as program budgeting, performance budgeting, and zero-based budgeting, have changed the way budgeting is performed. These methods have shifted the focus of public budgeting from financial control and accountability to analyzing alternatives and achieving performance objectives. About half of local governments now use one of these methods or a hybrid thereof. (3)

Another important development in the past 40 years has been the introduction of national...