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Budget Guide

Reference Number: MTAS-1786
Reviewed Date: 12/14/2022

NOTE: This page and subsequent page content was formerly distributed as the "Budget Manual" publication. To read the entire guide, click on the PDF button above.

We all know what a budget is: a record of the money we expect to receive and how we expect to spend it. It’s a pretty simple concept but a little more difficult to put into action, especially when rules and regulations from state and federal agencies are thrown into the mix.

Why You Need a Budget

The state of Tennessee has a few things to say about your municipal budget. According to T.C.A. § 6-56-201 et seq., otherwise known as the Municipal Budget Law of 1982, “The governing body of each municipality shall adopt and operate under an annual budget ordinance. The budget ordinance shall present a financial plan for the ensuing year…” Furthermore, the city’s charter may dictate various other regulations, in addition to state law budget requirements. Refer to your city’s charter to ensure proper compliance. Besides being required by law, having a budget is not a bad idea. Can you imagine what it would be like if your city or town just took whatever money it received and simply paid for everything the departments spent? It might be fun to buy everything you think you need and want, but how long would it take for your checks to bounce? You need a plan of action with limits and controls.