Budget Negotiation: A look back at GFR in December 1993.

• Position: Rewind - General Financial Review

A budget acts as a contract between a local government and those it serves. Taxes and fees are exchanged for a variety of services. In addition, the budget sets overall parameters for how government will provide those services using employees, vendors, and partners to deliver value.

Preparing a budget can be done in many ways, but the budget officer needs to be careful how they negotiate decision points along the way. For example, according to the December 1993 issue of GFR they should not be:

* Playing ping-pong, with the department head asking for a 5 percent increase, the budget officer offering 3 percent, and both finally settling at 4 percent.

* Intimidating a department head into submission because the budget person has better access to the top.

* Smiling a lot and trying for the budget that angers the fewest people.

* Generating reams of spreadsheets, charts, and graphs to prove there is only one correct budget.

* Feeding data, ideas, printed reports, and maybe gossip to the chief executive officer and letting the CEO, who "is the only one with power," handle the personal confrontations.

Any of these tactics may work in the short run, but they're destructive to real organizational achievement.

The good news, the article explains, is that negotiating skills can be learned, and adding these skills to the technical ones already possessed will make for a more confident--and consequently more effective--budget professional.

Planning. The mission statements of the organization, the budget office, and the department in question are combined with the specific directives from the CEO as a constant reminder of the purpose behind the budget process. The budget officer then looks for the quantitative and often-overlooked qualitative pressures that face the department to better understand the other side. If additional research is required, the budget officer should identify it now and set specific deadlines for completion.

Organizing. Several organizational factors can be controlled or influenced to improve the prospects for a positive negotiating experience. Sound strategy requires:

* Controlling the timing. Time pressure, one of the most critical factors in any negotiation, is also the one area where the budget department has almost unlimited power to exercise...