What limits the anticipated miscellaneous revenues when preparing the budget?

When preparing the budget, the anticipated miscellaneous revenues are limited by the actual realized cash from the same source in the preceding fiscal year. This approach is rooted in the principle of conservatism in budgeting, which emphasizes using reliable and proven data to ensure that revenue estimates are not overly optimistic.

Utilizing actual revenue figures from the previous year provides a solid foundation for budgetary projections. It reflects the municipality's historical performance and offers insights into the potential for future revenue generation. By grounding projections in past performance rather than speculative estimates or unproven sources, municipalities can create a more realistic and financially stable budget. This practice helps prevent potential shortfalls that could disrupt financial planning and operations.

The reliance on past performance also fosters accountability and can strengthen confidence among stakeholders, including residents and governing bodies, in the budgeting process. Therefore, using actual realized cash from the prior year as a guide for anticipated miscellaneous revenues is a prudent and standard practice in municipal budgeting.