Budgetary Balance: The Norm, Concept, and Practice in Large U. S. Cities

How does budgetary balance affect the budgetary process? Is budgetary balance in fact the ideal and empirical reality portrayed in the prescriptive and descriptive literature on municipal budgeting? This study confirms empirically the pivotal role of balance and details its operation in the 100 most populous cities in the United States. Bridgeport's brush with bankruptcy demonstrates the limits of balance and how it differs from insolvency. It indicates that the court's ruling narrowed access to bankruptcy protection for municipalities legally required to adopt a balanced budget. This city's experience with a stringent requirement for year-end balance is the backdrop for examining tactical devices aimed at achieving formalistic compliance with balanced budget requirements and cautions against overrating the power of balance as budgetary disciplinarian. This study concludes that municipal budgetary behavior cannot be reduced fruitfully to a single criterion, even one as widely accepted as budgetary balance.