balanced budget: noun. A budget is balanced when current expenditures are equal to receipts
balanced budget: Government budget where the current expenditure equals current revenue.
balanced budget: A budget for which expenditures are equal to income. Sometimes a budget for which expenditures are less than income is also considered balanced.
There you have it. A general-purpose dictionary, a business dictionary and an investment dictionary all agree. So, when I looked at Richardson's proposed 2011-2012 budget, saw that expenditures ($188.6 million) exceeded revenues ($186.9 million), and pronounced it "not balanced," it seemed to be an easy call for me. I couldn't understand why the city insisted the budget was balanced. I did have my theories:
"Maybe there's a state legal requirement that city budgets be balanced, meaning there's a legal definition of what "balanced" means that doesn't exactly match the dictionary definition. As long as the city meets the legal definition, their budget is in (legal) balance, even if the numbers show a teensy-tiny (dictionary) deficit."
After the jump, Bill McCalpin fleshes out that theory.
In an article on Rumorcheck.org worth reading in full, Bill McCalpin cites this section of the Richardson City Charter:
"Section 11.06. - Budget appropriation; tax levy. On final adoption, the budget shall be in effect for the budget year. Final adoption of the budget by the council shall constitute the official appropriations for the current year and shall constitute the basis of the official levy of the property tax as the amount of tax to be assessed and collected for the corresponding tax year. Estimated expenditures for operating purposes will in no case exceed proposed revenue, plus reserved fund balance, and other financing sources. Unused appropriations may be transferred to any item required for the same general purpose."
There you have it. The city considers the budget balanced if expenditures are less than revenue, plus reserved fund balance, and other financing sources.
So, even though the dictionaries are against them, the city council has the backing of the city charter. That's their story and they're sticking with it. And because my own complaint has been the violation of the English language, not a disagreement with the wisdom of city policy, I'll close the book on this question, with just one little postscript. I'll note that the city charter doesn't describe this situation as a "balanced budget." In fact, it doesn't require a "balanced budget," in those words, at all. It does call for expenditures to be less than revenue, plus reserved fund balance, and other financing sources. That's something else.