To Understand, Just Divide by 365

I’ve been thinking more about transparency ticker tapes since I wrote this post.

The problem, I realized, with budget documents, like this 2017 one for Prince Edward Island, is that everything’s expressed in year-long chunks. And when faced with tables like this, most people who are not the Provincial Treasurer, myself included, glaze over with with incomprehension.

A snippet from the 2017 PEI Budget showing Expediture Summary for 2017-2018

Things become much more comprehensible when you divide year-long numbers by 365 to get day-long numbers.

So, for example, it costs about $726,000 a day to have schools, early learning centres, museums and libraries.

And it costs about $16,000 a day to have a Legislative Assembly, $7,000 a day to have a Chief Public Health Office, $1,900 a day to have a Premier’s Office, and we spend $21 a day on forest fire equipment.

We get about $2 million a day from the federal government, $90,000 a day from tobacco taxes, $20,000 a day from beverage container deposits, and $1,900 a day from boiler, electrical and elevator inspection fees.

When everything is rolled together, we take in about $4.9 million and spend about $4.4 million, every day of the year (note that I’m not including the substantial $197 million a year spent on interest and amortization in this calculation).


Kerry Campbell's picture
Kerry Campbell on May 15, 2017 - 16:52 Permalink

I love what you did here, but I think your final figures may be a little off. Or else the surplus in this budget will be much bigger than originally announced.

I wonder if you're including spending on interest & amortization on capital projects from previous years. You can find those on the budget summary on page 7 of the new book.

If you're figures are correct -- well it's good news for all of us.

Peter Rukavina's picture
Peter Rukavina on May 15, 2017 - 17:27 Permalink

To arrive at the sentence:

When everything is rolled together, we take in about $4.9 million and spend about $4.4 million, every day of the year.

I looked at Page 7 of the 2017 PEI Budget and did the following calculations:

  • Total revenue of $1,812.274,900 ÷ 365 = $4,965,136 = “about $4.9 million.”
  • Total program expenditures of $1,613,761,900 ÷ 365 = $4,421,265 = “about $4.4 million.”

I’m not, as you mentioned, including the interest and amortization of $197,912,000 as “spending,” which perhaps I should have. But that money seems more like “magic fairy dust” than “buying forest fire equipment.” Which, I suppose, is the source of the problem.

If I include the interest and amortization, the “spending” figure becomes:

  • (Total program expenditures of $1,613,761,900 + total interest and amortization of $197,912,000) ÷ 365 = $4,963,490 = “about $4.9 million.”

Put another way, if we didn’t have to pay interest and amortization, we’d have an extra half a million dollars a day to spend on whatever we want.


Kerry Campbell's picture
Kerry Campbell on May 16, 2017 - 08:56 Permalink

That extra half-million dollars a day is just shy of the surplus government has predicted for all of next year. So again, divide by 365....