ELLINGTON — The Board of Finance on Wednesday unanimously approved the formal adoption of zero-based budgeting for the upcoming cycle, an accounting method that’s based on using the current economic environment as a guide, rather than past practices.
Goals, and the best ways to achieve them, drive the concept, Chairman Michael Purcaro said. This differs from former budgeting approaches that are often produced by taking the previous year totals and adding a few percentage points to account for wage increases and inflation, he said.
The term zero-based does not mean departments won’t be getting budget increases, but just that they should not base requests on what they received last year.
Department heads should look at why a particular program or piece of equipment, for example, should be included in their budget proposals, Purcaro said.
Finance Board co-vice chairman Joseph E. Wehr Jr. said department heads are expected to explain how they came up with a budget number and what they want to accomplish for the year.
The board’s unanimous vote was to formalize an approach to budgeting that town Finance Officer and Treasurer Tiffany Pignataro began when she first started her job with the town in April 2020, Purcaro said.
The Finance Department started these efforts last year to help align the town’s operating budget with the town’s short-term and long-term goals and objectives, Pignataro said. Zero-based budgeting allows departments to plan for what they need to be successful, rather than simply going with what they’ve always budgeted, “just because,” she said.
Peter Pyhrr, an accounting manager for Texas Industries, is credited with creating this method of budgeting in 1969. The author of “Zero Based Budgeting: A Practical Management Tool for Evaluating Expenses” was appointed in 1973 by then-Gov. Jimmy Carter to manage Georgia’s budgetary process.
For more coverage of Somers and Ellington, follow Susan Danseyar on Twitter: @susandanseyar, Facebook: Susan Danseyar, reporter.
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