Reflections on the Budget Forum

Written by: Katherine Wallace on Jul 24, 2006 12:47 AM EDT

Linked to groups: Progressive Democrats of Somerville

On June 29, 2006 PDS held a forum to explain what goes into making a city budget "Somerville Budget Basics!"
*What is in a city budget?
*Where does the money come from?
*What does it pay for?
*How is the budget created in Somerville?
*What is the budget process in other cities?
*How can I get involved?

Our Issues Co-Chair Fred Berman shares his thoughts on the forum:

The following are my thoughts about last week's very successful PDS Budget Forum, and where we go from here. Thanks again to all the panelists. We encourage you to help us think about next steps. If you are not already members of PDS, we encourage you to join us!!! (to download a membership brochure, go to www.pdsomerville.org/join.pdf... ) If you are interested in helping to think through the next steps in this process, please reply to Fred Berman at Fredlori@rcn.com or 617-776-0503

General Thoughts

(1) We had a great turnout, probably a total of 25 people plus the panelists -- and everyone got to leave in time to see the fireworks!. (By comparison, only four people testified at this year's Board of Aldermen's budget hearing; could it have been that we served food?).

(2) The panelists at our forum did a very good job of painting a general picture of the budget and budget process. It took just about all of the first 90 minutes to cover that ground; it's a good thing that we didn't plan on addressing specific issue areas.

Although we only scratched the surface, we probably have to find ways to short-circuit most of the detail we DID cover ... if we hope to make future discussions about the budget accessible to a broad segment of the public. Most people probably don't have the time or stamina to participate in a generalized workshop on the nature of the budget and the budget-making process AND to engage in a discussion about more specific aspects of the budget.

(2) At the same time that we need to think about strategies for condensing the time and energy it takes to get up to speed about the "big picture", we need to be thinking about which aspects of the budget are worth exploring in greater detail.

Are we better off focusing on what we are getting for our money, rather than on how much we are spending and what we are spending it on?

That is, rather than looking at line items, should we be working to come up with performance measures (a la SomerStat) that focus on the how well City government is meeting our needs? Whose needs? What needs? As per notes below, these are the kinds of questions that were raised in the discussions about how other cities, like Newton and San Francisco, have navigated the tradeoff between line item analysis and outcome analysis....

Stephanie Hirsch's impressive presentation about how substantially the Somerville Budget document has evolved in even the past few years, the brief comments about the impact of the Internet in making the Budget more accessible, Sandy Pooler's discussion about the evolution of the Newton Budget (where, like Somerville, the Mayor proposes, and the Board of Selectmen can only cut or make recommendations for increased or new appropriations), and various references to other Cities' budgets all provided food for thought about HOW a budget document can be a useful tool for City policy analysts and residents, and how the FORMAT of the document can help inspire discussion and helpful analysis / planning. Sandy observed that PERIODIC CHANGE in the format may be intrinsically valuable in that it forces all of us to re-examine how the budget is put together and what it all means.

All of that discussion suggests the need for a re-examination on OUR part as to what we hope to get out of broader public debate about the budget: On the one hand, line item analysis and the micromanagement it entails might be useful if we think that there are inefficiencies or misuse of funds. On the other hand, if that isn't much of a concern, or if the effort to answer such questions is too great or unsustainable, then line item analysis may be a level of detail that distracts from policy questions that have more tangible implications for us and other members of the public.

(See breakdown at the end of this email about possible topics for detailed explorations. )

(3) Somerville is so heavily dependent on Local Aid (33% of appropriated operating budget) that it is difficult to plan too far ahead, since we don't know what the "Cherry Sheet" will allocate. Given that level of dependence, and given the proportion of the Budget that is tied up in "fixed" costs, a relatively small change in Local Aid can have a major impact on the availability of funding for discretionary spending. So, any planning on discretionary spending has to be couched in terms of contingencies: if Local Aid comes in at THIS level, we can allocate it thusly, whereas if Local Aid comes in at THAT level, we should allocate it differently.

(4) As hinted at in #2 above, my takeaway from the Budget Forum was that we need to step back and think about WHY we are looking to broaden participation in the budget process, and then think about the ONE or TWO interventions that might help forward our objectives.

** Are we concerned about accountability on spending? Why? Is it because we think that City funds are being inefficiently used or used inappropriately? In what ways can the City use the budget document to provide greater transparency? If we are to engage in a discussion about actual line item spending (as opposed to spending priorities), what kinds of ground rules are needed to ensure that the tone remains constructive and cooperative, rather than accusatory or defensive?

** Are we interested in building broader support for taxes and a possible Prop 2 ½ override or other sources of revenue generation? What is so important to fund that we need additional revenue? Is there broad-based support for those funding priorities?

** How does the budget reflect current funding priorities? How would different constituencies characterize their funding priorities? What are the budgetary implications of those priorities? How do those priorities differ from constituency to constituency? What are the tradeoffs underlying decisions to fund or increase funding for one program or initiative vs. another?

(4) The last half hour of brainstorming and audience participation provided some excellent suggestions as to HOW to make the budget development process more accessible to residents...

(a) focus on the budget before the only decision is what to cut, that is, LONG BEFORE it is formally sent from the Mayor to the Board of Aldermen. Besides allowing more creative input into the budget process, earlier involvement will allow more time for discussion, as compared to the gotta-get-it-done pressure that the City feels as June draws to a close.

(b) since budgets don't change radically from year to year, do a "post-mortem" in the FY 2007 budget to identify targets for changes in FY 2008.

(c) figure out creative ways to use media to illustrate budget questions, and to make policy and other debates more accessible to residents.

(d) instead of trying to mobilize a big crowd to a single hearing, plan a number of smaller meetings, perhaps focused on specific interest areas, so that people feel a PERSONAL and COMPELLING reason to participate

(e) involve decision makers (and opinion leaders with differing perspectives), so that participants can hear articulate discussions about the pros and cons of different budget strategies

(f) numbers can be boring. Find ways to link numbers to meaningful and tangible aspects of life in Somerville or the performance of government.

(g) Focus on a few key decisions at the formative stage of the budget, and work with the Administration to find openings for discussing the City's choices

(h) Include food and refreshments at all meetings.

(i) work with Somerstat (Stephanie Hirsch is very amenable to sitting down to talk about opportunities to use SomerStat)

(j) work with representatives from the Mayor's office and the Board of Aldermen to explore strategies for building a more interactive budget development process that gives the Aldermen more time to understand what they are being asked to vote on. When the Mayor was an Alderman, he had the same concerns about lack of lead time that members of the BOA have today.

(5) TO BE CONTINUED!!!!!!
-----------Possible topics for future in-depth explorations -----------------------------

(a) Revenues

(i) how property taxes are set, and the interactivity between commercial and residential property taxes;

(ii) how federal funds are used, and potential alternative uses;

(iii) the kinds of grant funding that the School Department, Health Department, and other City Departments access, and the opportunities for and barriers to accessing additional grant funding;

(iv) what are the best opportunities to increase revenues with minimal adverse impact to Somerville residents and businesses?

(b) Capital Expenditures, Bonding, Our Bond Rating and Its Determinants

(i) the kinds of capital projects we are currently paying off, their cost, and their contribution to our annual debt service

(ii) the kinds of capital projects that are awaiting bond funding (sewer separation? more bridges? High School re-construction? Library renovation?), and the projected magnitude of their costs and annual debt service

(iii) how capital projects are budgeted, how actual expenditures are monitored, what we can learn from the experience of the Lincoln Park School (which has a longer term payback period)

(iv) our Bond Rating and what we can do, if anything, to lower our interest rate

(v) where affordable housing fits into the picture

(c) The Operating Budget

(i) "Fixed Costs" - Health insurance, pensions, and other "fixed costs" constitute a large portion of the municipal budget. Is it worth learning the details of what we are paying for in these areas, or is our energy better focused on discretionary spending?

(ii) School Budget: to what extent is additional line item analysis useful? To what extent is greater line item detail needed to allow meaningful analysis? To what extent can we link line item funding to specific educational objectives?

(iii) Public Safety, Public Works, Public Health and Human Services, Arts/Culture and Recreation: to what extent is line item analysis useful? To what extent is greater line item detail needed to allow meaningful analysis? To what extent can we link line item funding to specific objectives?

(iv) Other priorities: what kinds of priorities are inadequately funded? How can City funds leverage other sources of funding for these priorities?

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Location: Somerville, MA 02144