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Polco News & Knowledge

How to Triple the Impact of Priority-Based Budgeting With Public Engagement

priority based budgeting and engagement

Watch the webinar and discover the first steps toward local government finance innovation and successfully implementing priority-based budgeting. 

Many finance leaders have recognized the cracks and ineffectiveness in traditional local government line-item budgeting. There are too many missed opportunities to fund projects that could benefit communities. Luckily, new ideas and better technology have opened up the possibility of profound change in the budget process. 


Priority-based budgeting, allocating funding based on what matters most to the community, is one of the strategies innovative governments use to invigorate stale  processes.
But not all PBB is created equal.

New research shows that resident engagement makes PBB reallocation three times more impactful. 

In this webinar, government finance leaders discuss PBB and how engagement makes it stronger. Plus, get two examples from communities that have successfully implemented priority-based budgeting.

Levels of Priority-Based Budgeting Mastery 

Chris Fabian Tyler Technologies Priority Based Budgeting Chris Fabian is a pioneer in PBB and the Director of Product Strategy at Tyler Technologies, a company that helps strengthen communities with various tech solutions. He says to recognize organizations throughout their journey, Tyler Technologies categorizes PBB into four levels of mastery.  

Level 1
Communication: The first step is simply switching the conversation from line items to outcomes. Fabian says this sounds easy, but it's a significant breakthrough for local governments to start thinking and talking differently about budgeting.

Level 2
Readily Available Resources: Organizations at this level discover potential funding areas to reallocate. They find alternative ways to do business outside of cutting programs.

Level 3
Impact - Fund Unfunded Programs: At this level, organizations have internal buy-in and use PBB as a resource allocation engine to achieve organizational goals.

Level 4
Leverage Resources Regionally: At the last level, local governments partner with outside organizations to achieve budget goals in broader areas. 

The Value of the Resident Voice in Priority-Based Budgeting

Community engagement can amplify these levels of mastery. However, where governments typically use engagement in the PBB process is not the most effective. 

David Mitchell University of Central Florida Priority Based BudgetingDavid Mitchell is a University of Central Florida City Management Professor and a former budget analyst. He recently investigated the efficacy of engagement at three different stages of PBB: goal setting, prioritization, and allocation.

In most cases, residents participate in the goal-setting stage. However, Mitchell's research shows that using the resident voice at this point results in only a tiny change in funding allocation compared to not being involved at all.

Graph showing how to triple the impact of priority based budgeting with engagement

The graph above shows the percentage of funding reallocation discovered at different stages of PBB and different levels of engagement. Residents participate in the involve, collaborate, and empower levels of engagement. The inform level is staff only. The consult level includes staff and council only.

However, including residents in the prioritization and allocation stages resulted in three to four times the amount of reallocation dollars discovered. 

"The traditional notion that public engagement only occurs in the goal-setting arena is flawed," he said. "We need to pay attention to the prioritizing and allocating arenas as well."

Priority-Based Budgeting in Action

Lawrence, Kansas, PBB and Engagement Case Study 

The City of Lawrence recognized the need to implement PBB and involve residents in the process. 

Craig Owens City of Lawrence Kansas Priority Based Budgeting"In government, we put up a lot of walls—sometimes even intentionally put up some barriers—through our jargon, through line item processes, through the complexity of our organizations, which did serve some purpose sometimes somewhere, but they really don't anymore," said Lawrence City Manager Craig Owens. "With the expectation of greater transparency and greater access to everything… those things have made it necessary for us to make some significant changes."

To get started, the City put a lot of energy into strategic planning. Over 3,000 residents participated in this process, which included surveys and other research. Lawrence also used the Budget Simulation by Polco to get resident feedback.

The simulation mirrors the City's real-life budget. Residents add or subtract funding items based on what matters most or least to them. The process teaches participants how the budget works while giving city leaders data on budget priorities. 

budget simulation screenshot priority based budgeting

Pictured above is an example of a balanced Budget Simulation.

"If we didn't have [the planning] foundation, the rest of the budget work and using these great tools really wouldn't have been as elegant, and it really wouldn't have worked as well," he said. 

City officials also identified the cost of every program to understand expenditures better.

With PBB, data, and engagement, decision-makers crafted a budget that was as objective as possible. 

"I boldly say this isn't just budgeting—this is democracy. And so we're trying to give those handles to the community. We need them to see it is not the city manager's diabolical plan; it is your plan," Owens said.  

Fort Worth, Texas, PBB and Engagement Case Study 

The City of Fort Worth is early in its PBB journey. About nine of the City's 25 departments have gone through the process thus far.

Amethyst Sloan City of Fort Worth Texas Priority Based Budgeting"One biggest learning aspects we've gotten out of our early dabble in PBB… is it's primarily an education tool, "said Amethyst Sloane, the Strategy and Performance Manager for the FWLab, which finds ways improve government with data.   

Sloane says it's a misconception that PBB tells governments exactly what to do. Instead, PBB gives organizations information to help them make better decisions.

She says the City's departments that have done PBB have a better understanding of what everyone else is doing internally and how it connects with the City's overall strategy.

"We are marrying everything together," she said.

For the engagement piece, the City also uses Budget Simulation to see what residents think about council priorities.

Sloane says that once they fully implement PBB, the City aims to get more input on critical decisions. She said it would be tough to enter that space without the work they have done now. 

The Three C's of Budgeting Engagement for better Priority Based Budgeting: Constraints, context, consequence:

The Best Engagement to Amplify PBB

Chris Adams, Executive Strategist at Polco, discovered three keys to successful budget engagement. Using engagement methods that use these keys results in more reliable data for better informed PBB.

  1. Constraints: Educate residents on what's possible. There is only so much money available. Are votes are required to raise taxes? What are the spending limits? 
  2. Context: Show residents what each item is. Why is it in the budget? What's the history? How did it get there? 
  3. Consequence: Demonstrate what it would mean to cut an item. What is the impact? 

Chris Adams Polco Executive Research Strategist Priority Based Budgeting"This is where I found the public is actually quite good," Adams said. "If you can find a way to present them with the trade-offs and the cost of providing those programs, they will actually be very useful and productive partners in terms of making some of those decisions."

The Budget Simulation (used by Fort Worth and Lawrence) includes all three keys. It restricts participants from making decisions outside of spending limits. It includes information icons to provide more context. It also demonstrates the trade-offs users might have to make to allocate money for their top priorities. 

"By putting people in the shoes of decision-makers—just temporarily in a simulated exercise—is a great way to enlist residents as allies in helping to make some of these hard decisions," Adams said.

Triple the Impact of Your PBB Efforts With Engagement 

Get started with the Budget Simulation to receive better data for priority-based budgeting. The Budget Simulation gives you reliable information on your community's priorities while educating residents on how government spending works. Take the first step toward better budgeting and transform your community!

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Related Articles

How to Get Buy-in for Priority Based Budgeting
A Roadmap to Collaborative Local Government Budgeting
Missed Opportunities To Build Trust in Local Government Budgeting

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