Expenditure Estimates

Many of the same principles used to estimate municipal revenues can also be applied to estimating expenditures. Historical spending is often a useful indicator of future expenditure patterns. For example, if a municipality has consistently spent less on office supplies than budgeted over the past two years, that spending history may provide a reasonable basis for estimating the amount needed in the upcoming fiscal year.

However, historical spending should not be relied upon exclusively. Unusual or one-time expenditures, inflation, contractual obligations, changes in staffing or service levels, and other anticipated factors should also be considered. A sound expenditure estimate uses historical trends as a starting point and adjusts them for known changes and anticipated future needs.