Equity Budgeting in Cities: Directing Dollars Where They’re Needed Most

Students in classes of public administration have historically been told that there are three pillars that should guide government spending: efficiency, effectiveness and economy. Over the last few years, a fourth pillar has been added: Equity. 

But equity in government can be a vague notion, full of platitudes and little action. That’s why equity budgeting has emerged as an effort to bring the rhetoric into reality in cities and counties. One thing that sets the equity pillar apart from the other three, says John Bartle, dean of the College of Public Affairs and Community Service at the University of Nebraska at Omaha, “is that it’s not just a means toward developing a well-crafted budget, but also an end.” 

The notion is straightforward: Take the needs of previously disenfranchised members of the population into account when allocating dollars for the next fiscal year. Of course, when there are lots of dollars available, equity budgeting could be a relatively simple affair: Just throw some new revenues at neighborhoods that have long been underserved. But we’re now in the midst of a pandemic-induced economic downturn, in which city revenues declined by 21 percent from the beginning of the pandemic through Dec. 1, 2020, according to the National League of Cities. That means it takes a genuinely earnest effort to engage in the practice. 

Such concentration of purpose is not rare, though. Chris Fabian, co-founder of ResourceX, a firm that consults with over 230 cities on performance-based budgeting, said, “It’s going to take resources in order to achieve any equity-based goals, and resources are scarce. But even during the pandemic, many of the cities with whom we work have said, ‘we can’t put the pause button on our aspirations for equity.’”

Louisville, Kentucky is one place that has demonstrated its commitment to equity-based budgeting. The city of 750,000 people has “vastly underspent in our black communities,” according to one of one of its council members, Bill Hollander. “We have 5,000 vacant and abandoned properties, mostly in our Black communities . . . many of our primarily Black neighborhoods have a population that is over 50% below the poverty line.”

City leaders have been trying to address these problems for several years, but last June, even as the pandemic raged, they renewed their commitment to the effort. The city council passed a budget that provided more resources for affordable housing, to clean up abandoned properties and make certain that healthy foods are available in parts of the city that are “food deserts.”

The key in difficult economic times is to find ways to shift funds around to help provide aid to historically underserved neighborhoods. 

For example, Denver’s fiscal year 2021 budget cut funding for the city’s parks and recreation department by 4.6 percent. Yet, even with fewer dollars available, “we preserved the hours in our rec centers where our minority communities are,” says Brendan Hanlon, the city’s chief financial officer. “We preserved those, while taking money back from our larger rec centers in other parts of the city.”

“It’s not about adding money to the budget,” said Brion Oaks, chief equity officer in Austin, Texas. “It’s a matter of deciding what your priorities are.” Austin has been in the equity budgeting arena for longer than most other cities. The Texas state capital had an epiphany in 2015, when a report by Richard Florida for the now-defunct Martin Prosperity Institute found that the Austin metro area was the most economically segregated in the United States. 

Within months, the city passed a resolution calling for “the development of an equity assessment tool to be used by every city department during the budget process.” In October 2016, Austin established the position of chief equity officer, which Oaks has held since then. In collaboration with the budget office, Oaks began working with a number of commissions that had already been established, representing African Americans, Asian Americans, older people and other segments of the city’s population, to ensure that the groups they represented had a formal role in the budget process.

One product of these efforts was an initiative that provided equity mini-grants to nonprofit groups. Smaller nonprofits often don’t have the resources to get city contracts, but Austin is now providing $500,000 in order to help them get through the process. “Given that these were small organizations, we said we’d make all the funding available to them at the beginning of the process,” Oaks said.

One challenge to equity budgeting is what could be called I’ve Got Mine, Jack Syndrome. It can be applied to any group which is already well established in a community, and is loath to share its largess with newcomers. Representatives in cities interviewed for this column acknowledged this mindset is a challenge to equity budgeting. “Need is always greater than the amount available, so there are always tradeoffs,” said Simone Brody, executive director of What Works Cities.

Karla Bruce, chief equity officer of Fairfax County, Virginia, agrees that tradeoffs can be challenging to budgeters. But her county is taking steps to help overcome potential public resistance. In 2016, the county’s board of supervisors, in cooperation with its local school board, adopted a joint resolution called One Fairfax, based on the notion that the county is best served when it supports all its residents.

Bruce stressed that equity isn’t only a moral imperative, but an economic benefit to the county. “As we grow,” she said, “our population is diversifying. If we want our community to continue to be successful, then we have to be sure that all people are able to live and work to their fullest potential so they can participate in our economy.”

Another challenge to equity budgeting is the lack of data necessary to clearly identify the groups of people and the neighborhoods most in need of capital. Beyond that, there’s often an absence of the kind of information necessary to make sure that the approach is having the desired outcomes. 

There’s some good news on this front. Last October, 30 cities began to receive training from the organization What Works Cities to help them improve their capacity to gather and use data on spending tax dollars in a societally fair fashion. In March, What Works Cities will begin to provide technical assistance to the same cities.  

Many of the entities that are making the greatest advances in equity budgeting have been in the forefront of data-gathering. Tacoma, Washington, for example, has established an Equity Index, which, according to the city’s website, “is one of the primary tools that city staff, community members, partners and other decision makers can use to help ensure that they are making data-informed decisions that address these indicators and improve access to opportunity for all Tacoma residents.”

The index uses 20 data points, including voter participation, the number of households with internet access, healthy food availability, life expectancy and high school graduation rates.

“If you look at the equity index and see where white people and people of color live, they match up very clearly with where the overinvestment and underinvestment take place,” says Nick Bayard, Tacoma’s assistant chief equity officer. “We created this situation as a city, and now we have to undo it.”