AN ESP APPROACH TO BUDGETING

A recent comprehensive study on budgeting published by University Press of America features a three part budget plan to produce a balanced budget. The plan is called "An ESP Approach to Budgeting." The plan has little to do with Extrasensory Perception; E stands for Existence, S for Survival and P for Progressive. Simply put, rather than plan spending and hope for income to cover costs, spending is planned and expedited as income warrants.

In the first stage, E, a budget is planned with the most conservative income and only the absolutely essential costs necessary for existence are included. This is a down hill budget that would lead to future bankruptcy but it allows the enterprise to exist in hope. In the second stage. S, enough income is budgeted to cover the expenses necessary to maintain operations and survive. In the final stage, P, spending is prioritized and activities are expedited as income allows. This is an Ultra-conservative approach and is perhaps more acceptable for "out of control" government entities than for high risk, low security entrepreneurs. It discourages the "fast buck, pot of gold" dream, but it reduces the catastrophic failure syndrome.

The ESP approach may be the road to recovery for bankrupt states and local authorities across the country who are apparently stagnated in the tax/benefit dilemma. Slowly developing activities in the progressive budget stage could not only stimulate tighter financial control, it could also portray a vivid picture to the public of the correlation between taxes paid and the benefits received, giving the public a more realistic understanding of how tax monies are used.

The study suggests that a total involvement of everyone effected by the budget in the budget process produces a more effective and efficient financial operation. Skillful monitoring of the budget is essential for adjustment to unanticipated conditions and circumstances.