PHILADELPHIA – The City today announced that it will launch a landmark process known as Participatory Budgeting, which will – for the first time in Philadelphia — allow for direct community involvement in City spending decisions. The City also announced other changes for the upcoming Operating and Capital budgets to increase racial equity in the process and decisions about city revenues and spending.

“Our vision, for this budget cycle and beyond, is to make investments that provide quality government services and infrastructure while maintaining the City’s long-term fiscal health, reduce racial disparities among Philadelphians, and advance equitable outcomes for all Philadelphians,” said Mayor Jim Kenney. “Our budgets must reflect the commitment to creating a more equitable Philadelphia, where race, ethnicity, disability, gender, gender identity, sexual orientation, income, or neighborhood are not a determinant of success or life outcomes.”

“Linking the City’s commitment to racial equity with the budget process is a vital step in ensuring that the City government’s policies, services, and distribution of resources address the distinct histories, challenges, and needs of different communities it serves,” said Nefertiri Sickout, Acting Chief Diversity, Equity, and Inclusion Officer.

$1 Million for Participatory Budgeting
Led by the City’s Budget Office in partnership with the City Planning Commission, Philadelphia is launching Participatory Budgeting, in which Philadelphians will generate ideas for infrastructure investments and vote directly on how to spend $1 million dollars on capital projects. The City plans to call for spending ideas from the public in the early spring, with the final vote happening in June 2021, around the same time that City Council will vote on the FY22 budget.

The Philadelphia City Planning Commission is seeking applications from community members to join the Re-Imagining Philadelphia Steering Committee. The Committee will design the Participatory Budgeting process, guiding the City on how to engage the public more collaboratively and inclusively. The Committee will also help build the foundation for how the next physical development plan of the city (known as “The Comprehensive Plan”) is structured.

“This is an opportunity to amplify the voices of previously “muted” constituencies in order to serve community needs and values through planning and participation in the budget process,” said Planning Director Eleanor Sharpe. Residents interested in being part of this initiative can apply by calling 311 or applying online (https://forms.gle/vewQ5W7Fiq2FeL8eA) by December 15, 2020.

To further support Philadelphia’s first Participatory Budgeting effort, the City has also engaged the non-profit Participatory Budgeting Project (PBP). PBP has worked with cities including Oakland, Boston, and Seattle and has a proven track record of working to deepen democracy, build stronger communities, and make public budgets more equitable and effective.

More Opportunities for People Outside City Government to Influence Budget Proposals
While Participatory Budgeting will provide direct decision making by members of the public, it will represent just a small sliver of the budget. For the larger budget, the City will seek more direct and indirect input into the needs and preferences of Philadelphians, with concerted efforts to engage Black and Brown Philadelphians. This will complement City Council’s public hearing process which occurs after the Mayor proposes the budget but before Council makes any amendments and takes a final vote.

“In partnership with the Mayor’s Office of Public Engagement and staff throughout City government, we will gather feedback early in the budget development process through focus groups with community organizations, business leadership, the City’s frontline employees, and other groups,” said Budget Director Marisa Waxman. “We are all learning and adjusting as this pandemic affects City operations and finances. Community needs are increasing while revenues are declining. As we work to make difficult budgetary decisions, we need to hear more voices and perspectives.”

Making budget information more accessible to the public will be essential to increased public engagement in the budget process. The City will continue to enhance its budget materials to make them easier to find and understand. This past year’s budget process brought an upgrade of the layout of the Five-Year Plan and introduced graphic, summary documents in multiple languages. In addition to continuing those new formats, the City in Fiscal Year 2022 will offer new ways to get budget information, including videos and interactive budget calculators.

More Opportunities for People Inside City Government to Influence Budget Proposals
The City will broaden and diversify the group of city employees who provide input into selecting funding options to put in front of the Mayor as a recommendation. This will include employees of different demographics and backgrounds for a more inclusive perspective on budget options.

In the spring of 2020, as the City was faced with dramatically reducing the FY21 budget to reflect the economic impact of COVID-19, the Office of Diversity, Equity and Inclusion convened a Budget Equity Committee to review the options for spending reductions with the goal of assessing the equity impact of proposals on Philadelphia’s communities of color and low-wealth communities. This group will be reconvened for the FY22 budget to weigh in on budget proposals. Additionally, to help supplement this work, the Budget Office will engage the Racial Equity Working Group, convened by the Office of Diversity, Equity, and Inclusion, which includes City staff at various levels and across many departments.

Embedding Racial Equity in the Internal Budget Process
As the Budget Office starts the FY22 budget process it will institutionalize explicit questions and procedures into the process. This will include:

• Minority Contracting Goals: Starting in FY22, operating budget meetings will include goal setting for spending with minority, women, and disabled-owned businesses. Goal setting previously was independent of the budget process.
• Revenue Impact Disparity Analysis: As the City considers any new revenue streams or changes to existing rates, the anticipated impacts on communities of color, low-wealth communities, and diverse businesses will be evaluated and considered as part of the decision-making process. In FY21, this approach led to selecting an increase in the Parking Tax as the path for increased revenues over other options, as disparities in car ownership by race and ethnicity in Philadelphia meant that this would fall more on wealthier, white drivers from inside and outside the city than on Black and Brown Philadelphia residents.
• Connecting Funding Requests & Racial Equity: In FY21, departments requesting new operating or capital funding were asked about the impacts on racial disparities, looking for both quantitative and qualitative information. For FY22, these questions have been refined and expanded and will apply to requests for new funding, existing funding, and spending reduction scenarios. Responses to racial equity questions will be submitted in writing along with requests for funding and be discussed at meetings between the Budget Office and the Department as part of the budget process.
• Disaggregating (Separating) Performance Data by Race: The City of Philadelphia uses Program-Based Budgeting, which groups spending within departments for activities and programs, and links spending, staffing and performance for those programs. For example, within the Streets Department, there is a Solid Waste Collection & Disposal Program. The budget is organized to show the cost for that program ($89M in FY21), the number of staff (972 authorized positions), and performance goals (91% of trash collected on-time). As the Office of Diversity, Equity, and Inclusion works with the first cohort of departments to develop Racial Equity Action Plans, the Budget Office will participate and provide support. This will include working with departments to disaggregate performance measures by race or other proxies to gain insights into disparities in service delivery which can guide future budget allocations.

Asking for Help
To support this work, the City is participating in technical assistance programs to connect staff with subject matter experts and leaders in other cities working on linking city budgeting and reducing racial disparities. Philadelphia is one of 30 cities in the Bloomberg Philanthropies/What Works Cities City Budgeting for Equity and Recovery program, a new effort that will help cities confront budget crisis while strengthening their commitment to equity in the wake of COVID-19. The program will help cities develop and implement plans to drive financial recovery and ensure that their budget crisis do not disproportionately harm low-income residents and communities of color. It will also provide the opportunity for leaders from the 30 cities to problem solve with a network of peers and produce a set of tactics for other local leaders to follow.

Philadelphia has also joined the Knight Foundation’s Budget Resiliency program. This program provides individual assistance and leverages the cohort model to better understand shared and differing fiscal challenges, with a special focus on leveraging equitable frameworks and strategies that promote social, racial and environmental justice to rebuild our cities. The program connects Philadelphia with expertise in budget strategy, analysis and problem-solving; transportation and innovative revenue-generation mechanisms; pilot development and implementation; social and economic justice; societal-cost benefit analysis; and municipal cohort facilitation.