Essay Example on Capital budgeting is a process that includes the Planning

This storm was the second of four nor'easters that occurred during the 2009 2010 winter This storm brought heavy snow to the Northeast s population The snow removal budget for Prince William County was greatly exceeded because this huge storm was not factored into the debt capacity The County must either increase its revenues or it must reduce its capital improvement plan either of which will create additional debt capacity If this doesn't happen the only other alternative upon reaching capacity is to suspend debt issuances and employ cash to capital until further capacity becomes available It is important to note that this alternative would significantly slow down the construction of needed facilities In order for the New York State Government to reduce the high debts it is extremely important that alternative funding options are established Seeking the assistance of the federal government of the United States of America is one of the most practical alternatives for the Prince William County Government to fund its debt obligations In addition to seeking assistance from the federal government of the United States of America another funding alternative for the county government is the maximization of revenues collected throughout the state Governmental entities can use debt funding grants permits recreation service fees annual appropriation or leasehold financing and private developers Refunding has several importance for example there are possibilities of taking loans that are payable at low interest rate and the maturity date can be extended 

The demand for services creates a demand for the financial infrastructure to support them Whether it is additional police and fire personnel with for public safety or more schools for the growing student population or more roads to ease traffic congestion the County will be looking to utilize its Triple AAA credit rating to provide low cost financing for these projects The effect of refunding or reorganizing existing debt obligations of the Prince William County Government is a great way towards dealing with the debt problems facing the state It is however important to out point the fact that the success of these kinds of methods strongly focus on the effectiveness of implementation of the plan One of the best ways to reorganize existing budget obligations is whereby the government emphasizes upon the debts with the highest interest rates These kinds of debts must always be prioritized since they can dramatically hamper the state's ability to undertake other financial obligations In addition to prioritization of debts based on interest rates another reorganization strategy is the reduction of the total expenditures incurred by the state government This will create an additional financial kitty that should be directed towards servicing the state debts Lee et al 2008 Local governments still consider it to be financially sane to borrow funds to meet all of the needs and demands of its citizens Debt financing provides a way for future generations to share the costs as well as the benefits Lee et al 2008 Innovations in municipal bonds and other ways governments use to give them access to capital for credit has not been enough The role of privatization in financing and operating public infrastructure has become commonplace in both industrial and developing countries Lee et al 2008 The process of determination of debt capacity has shown that the three most essential measures are outstanding debts property value and total annual revenues Reorganization of the existing debt obligations could significantly reduce the total debt of the Prince William County government Increment of less sensitive tax and seeking the assistance of the federal government are two of the most important funding alternatives for the state