How to Implement Fiscal Policy

The town manager is responsible for designing fiscal policy.

Fiscal policy is the term for the system used by government to manage its money. The needs of the citizens are met by individual departments, which are supported by money supplied by the central management of the government. A small town government can implement its fiscal policy, which will fully fund every department while monitoring the budget as a whole. This balancing act is necessary for the financial survival of the town. You can implement your town's fiscal policy by designing a budget that is both reasonable and responsible.

Instructions

1. Look at the needs of your town. Determine exactly what needs to be purchased and what labor needs to be paid for maintenance and in which areas. Write down each financial need in order of importance.

2. Make a list of the income that the town receives. Look at taxes, business license fees, building permit fees and other income. Any amount of money the town collects must be included on this list.

3. Compare your two lists to create a budget for the town. Consign money from the town's income to cover each of the prioritized needs. Consign any extra money to the town's savings account to be kept as surplus.

4. Allocate the funds outlined in your budget to the appropriate departments. Send a breakdown to each department head outlining how each dollar of his budget allocation is to be spent.

5. Monitor your town's spending throughout each quarter. Keep it at, or below, the amounts in your budget.

6. Convene a meeting of the town council and the department heads each quarter. Review your town's fiscal policy and make adjustments as necessary.

7. Raise taxes as necessary to cover shortfalls in the budget. Lower taxes when possible to allow citizens to keep more disposable income that will allow the town's businesses to prosper.

Tips & Warnings

• Fraud is a felony. Always be completely accurate and honest in all financial dealings. Make your town's financial records open to scrutiny at all times to avoid the appearance of impropriety.

References

• The Concise Encyclopedia of Economics; Fiscal Policy; David N. Weil; 2008