Happy Fiscal New Year

Remove all ads!

I'm not sure if this is in the right forum. I went with the AoDA, because even though it has to do with the government, this isn't politics per se.

According to the fiscal calendar of the federal government, 30 September is the last day of the fiscal year, so 1 October is the first day of fiscal year 2010. Many states have fiscal years that begin 1 July. I was wondering if anyone knew the reasoning for this, and whether this was a US phenomenon or many other countries had fiscal years considerably different from calendar years.

I can speculate that you wouldn't want the fiscal year to direcly lineup with the calendar year for a couple of reasons. First of all, Congress - which controls the purse strings - is not in session much from late November to early January, so it is reasonable to work out the new budget well in advance of the next year. Furthermore, on even-numbered years we have elections in November, but the new Congress does not get seated until January. If you waited until late in the year to pass a budget for the following year, several members of Congress who lost the election but who had not yet left office would be able to vote on the budget. (Although while this would explain why you would need to work out the budget in advance, it does not explain why the fiscal year needs to be different. You could pass a law saying the budget for the next year needs to be completed by 30 September, even if the funds did not become available until 1 January.)

It still seems like 1 October is a rather arbitrary date though. Elections are still over a month away. 1 July seems even more arbitrary. The only thing I can think of is campaigning, but that doesn't make complete sense either, because Congressmen have their constituents in one district or one state. They don't have to fly around to all different areas of the country like a presidential candidate does, and many of the incumbents have safe seats anyway, or don't have to campaign much. (Incumbents win the vast majority of elections. I'd hazard to guess that we get as many new members of Congress from an incumbent retiring as we do from a challenger defeating an incumbent in an election.)

 

In Canada, the fiscal year for the federal and provincial govenments runs April 1 to March 31. I have no idea why, though. I suppose part of the reason was to have quarterly periods coincide with calandar quarters (although I'm just speculating), but why March 31 instead of June 30, Sept 30 or Dec 31, I don't know.

 

I'm sure it's so that the new fiscal year can start on April 1. Must have appealed to someone's sense of humour

 

I came across this to explain the U.S. fiscal year.

...whatever that means...

Come to think of it, in Canada, I suspect the choice of March 31 is at least partially related to weather. People in Canada (not just government workers) want to enjoy their summers given our cold winters, and the last thing we want to be doing is working our butts off during the summer trying to prepare budgets. Also, federal parliament and provincial legislatures aren't in session during the summer. While some work would be done on the budget during (and even prior to) summer, I think the real crunch starts in September, so that the budgets can be tabled in February, in time for the next fiscal year.

 

From wikipedia lots of countries have different dates, usually Mar 31 or June 30. Wikipedia mostly just lists former British colonies. The States used to be June 30 until 1976 so there's no great historical reason why it's now 30 September. Maybe it was interfering with their holidays?

I know the reason it's done annually is a throw back to agricultural times, when everything had to be planned according to the crop/birthing cycle. I don't know if the Mar/June dates have a particular resonance with this though.