Three ways Austin & Philadelphia are Integrating Equity into the Budget Process
By: What Works Cities
Tags: Cities, Data, Austin, Budgeting, Philadelphia

Three ways Austin & Philadelphia are Integrating Equity into the Budget Process

Cities are facing extreme fiscal challenges, from increased costs associated with pandemic response and civil unrest to an economic recession that has caused severe losses in revenue. COVID-19 has revealed underlying racial disparities in access to healthcare and economic opportunity, making more salient the need to integrate equity as a core principle in the municipal budgeting process.

Given this context, the Bloomberg Philanthropies’ What Works Cities initiative launched the City Budgeting for Equity and Recovery program in October 2020. The program is helping 29 U.S. cities develop plans to drive financial recovery while strengthening their commitment to equity and provides a unique opportunity for cities to share lessons and problem solve with peers.

Marisa Waxman (left), Budget Director for the City of Philadelphia, and Ed Van Eenoo (right), Chief Financial Officer from the City of Austin.

We spoke with two leading City Budgeting for Equity and Recovery program participants, Marisa Waxman, Budget Director for the City of Philadelphia, and Ed Van Eenoo, Chief Financial Officer from the City of Austin, who shared their experiences building equity into budget and finance processes. Here are three lessons from Philadelphia and Austin who are innovating to make budget decisions more equitable.

1: Pursue Formal Structural Changes to Advance Equity

Both Austin and Philadelphia have committed to advance equity in all aspects of city operations by formally establishing Equity Offices.

In 2015, Austin’s newly elected City Council directed the City Manager to evaluate the impact of city policies and practices on racial equity. Austin officials developed an Equity Assessment Tool in partnership with the community to establish a baseline for the city’s impact on equity.

In 2016, the city’s first Equity Office was established to lead and guide the equity initiatives. Van Eenoo highlights that “the Equity Office and our Council Members in Austin are the major allies and leaders in advancing equity in budgeting.”

In Philadelphia, Mayor James F. Kenney exercised his authority to make equity a top priority. In 2016, the Mayor established the Office of Diversity and Inclusion, and in 2020 expanded it to be the Office of Diversity, Equity and Inclusion with the authority to execute a citywide Racial Equity mandate.

In light of the fiscal challenges this year, Waxman explains that a new “Budget Equity Committee was established to dramatically revise our budget proposal and held focus groups with community leaders to provide input into what to preserve and what we could cut to get the budget in balance with an emphasis on racial equity.”

2: Be Deliberate in Finding Opportunities to Prioritize Equity

Austin and Philadelphia are being deliberate in formalizing the incorporation of equity principles in budget processes and decisions.

Philadelphia’s leadership staff from the Budget Office sorting out high-level priorities for the upcoming budget through sticker voting to see where the team was aligned. Image courtesy of the City of Philadelphia. [Note: This photograph was taken prior to the COVID-19 pandemic.]

In Philadelphia, the official budget forms require each city department to reflect on how their departmental budget impacts racial equity. There are racial equity questions in the forms for existing budgets, new spending, and budget cuts, in part to help departments identify and understand any disproportionate disadvantages that certain decisions might confer on various communities. Moreover, in their annual budget meetings with departments, the Budget Office prioritizes having departments reflect on their procurement goals for contracting with minority- and women-owned businesses.

Making adjustments to the tool has made it possible to operationalize conversations about racial equity in the budget process. Waxman highlights that departments are at different stages of the equity journey, and the goal shouldn’t be solely about metrics but to “just get started” in normalizing conversations about racial equity as a budgetary priority.

Meanwhile, Austin’s Equity Assessment Tool takes departments through a critical examination of their policies, procedures, planning, programs, personnel, and budgeting which has contributed to normalizing equity conversations with departments. “Previously, City departments and staff made annual budget requests based solely on operational needs. Now, advancing equity is used as a baseline before any new program or initiative is added to the budget,” Van Eenoo explains.

Community members participate in conversations about the City of Austin budget priorities at the LGBTQIA+ Quality of Life Advisory Commission’s community budget forum. Image courtesy of the City of Austin. [Note: This photograph was taken prior to the COVID-19 pandemic.]

The City of Austin has also established nine Equity Commissions that aim to improve the quality of life for the communities they represent, including African American, Hispanic Latino, Immigrants, and LGBTQIA+, among others. In the FY 2021 budget, the Commissions used the equity assessment tool to make recommendations on how to advance health outcomes in these communities. This led to an increase of $1.8 million to the Public Health Department budget. This funding will be used for mental health services, family violence prevention programs and immigrant legal services.

In order to ensure budget documents are accessible and easy to comprehend, Austin utilizes “icons in the budget document to highlight new programs and initiatives that are designed to promote equity.” Van Eenoo explains that these actions represent a huge shift in the way the city used to work. Equity can be seen in processes, but also in how information is being communicated to the public.

3: Redefine Collaboration — The How and the Why

Committed to advancing equity in collaborative ways, both Austin and Philadelphia have redefined how they collaborate with others on equity, and why those collaborations are necessary.

In Philadelphia, Waxman notes that designing new equity-focused budget questions and standing up processes for increased community input requires collaboration. The Budget Office identified city agencies that were already embedding equity in their resource allocation decisions and engaging minority populations to learn from their experiences and determine approaches on how to incorporate new voices into the budget process.

Members of Philadelphia’s Re-Imagining Philadelphia Steering Committee meet in their Kick-off Zoom meeting. The committee’s first project is to co-design Participatory Budgeting. Image courtesy of the city of Philadelphia.

Waxman explains, “Our goal wasn’t for the Budget Office to invent something brand new or build trusted relationships with community members that would require a year to take root. We are not staffed for that in terms of size or expertise in the Budget Office. We were happy to tap into existing networks of connections between City government staff and offices with expertise in community engagement to accelerate the work.” This collaborative effort developed transformative cross-agency buy-in, enabling Philadelphia to launch a Participatory Budgeting initiative, which will allow — for the first time in the City’s history — direct community involvement in City spending decisions.

For Van Eenoo one key aspect for integrating equity principles into the budget process in Austin was to “allow room for co-creation and not pre-determining the process — in other words, letting it happen through stakeholder collaboration and thoughtful deliberation.” Departments and public commissions engage with one another to make budgetary recommendations in advance of the city manager. Austin created a dashboard that includes the city’s definition of equity and links to equity dashboards for every department. Increased transparency paves the way for increased opportunities to collaborate and to share decision-making power, which represents a major shift in how local government collaborates with its residents.

Community members discuss budget priorities for the City of Austin at the Asian American Quality of Life Advisory Commission’s community budget forum. Image courtesy of the City of Austin. [Note: This photograph was taken prior to the COVID-19 pandemic.]

Austin also collaborates with external partners, such as the Center for Place‐Based Initiatives (CPBI) at The University of Texas Dell Medical School, to evaluate equity assessments from city departments including the Budget Office. Departments are then further empowered to create an Equity Action Plan with measurable indicators.

In the wake of COVID-19, cities have the challenge of allocating scarce resources to help residents with the most urgent needs. Incorporating equity in city budgeting is more critical than ever. Waxman highlights that “there is no need to start from scratch” and urges cities to start conversations with an equity lens and build up from existing experiences in city agencies. Van Eenoo highlights “this is not a one-off project,” and that integrating equity into the budget process requires a willingness to depart from the status quo, have honest conversations, and continually evolve practices and operations — a complete culture shift.

Launched by Bloomberg Philanthropies in April 2015, What Works Cities helps local governments improve residents’ lives by using data and evidence effectively to tackle pressing challenges.

Philadelphia is What Works Cities silver Certified and Austin is on the What Works Cities Certification Honor Roll. What Works Cities Certification is the national standard of excellence for well-managed, data-driven local government.