I had the uncomfortable feeling that he was speaking to me. So, even though I didn't think there was anything left to say, let's go, after the jump, to Keffler's argument and my response.
Keffler apologized for being "infantile" in wanting to read from a document published by the Government Finance Officials Association (GFOA):
"Budgeting involves a use of estimates. Naturally the conservative use of revenue estimates over time can produce a significant fund balance surplus. While it is usually good financial practice to maintain a healthy fund balance surplus, such amounts may eventually exceed a government's need as expressed in its fund balance policy. In that case a government may decide to fund a portion of the annual or biennial appropriated operating budget with the existing budgeting fund balance rather than by raising new resources, thereby putting fund balance back within the range established by the government's fund balance policy. In such cases an excess of expenditures over revenues will occur in a year in which fund balance is budgeted in place of additional revenue. Clearly it would be wrong to interpret such a planned reduction of fund balance as an indication of a potential financing problem."
This explanation for what makes the proposed budget "balanced" suffers from the same flaw as Bill McCalpin's earlier explanation. McCalpin used the City Charter to defend the city's practice of sometimes having expenditures exceed revenues, Now, Keffler uses a GFOA document. The flaw is this: just like the City Charter, the GFOA document also doesn't call a budget in which expenditures exceed revenues a "balanced" budget. It doesn't define that phrase at all.
Instead, it simply explains the conditions under which an unbalanced budget might be the right thing to do. Under those conditions, an unbalanced budget is not an indication of a potential financing problem. And I agree with that.
My argument isn't that Richardson's proposed budget is not prudent or is not in compliance with the City Charter and GFOA standards. My argument is with Keffler's contention that "these are balanced budgets." When expenditures exceed revenues, the budget clearly isn't balanced, even if the practice is justified, prudent and sensible.
In summary, I agree with everything Keffler said in defense of the budget's bottom line, except for that one introductory sentence: "These are balanced budgets."