Bi-Polar Budgeting

by Robert Herold


While we can hope for something constructive to come out of the city's budget woes, so far the news isn't reassuring. On one side of the debate, we have Councilman Eugster, who proposes to reduce the city to what he terms "basic services" -- police, fire, roads. He goes so far as to make the assertion that these are the only legitimate services that cities should perform anyway. On the other hand, our mayor asks for a percentage cutback. What we need is a third track to the debate, looking at ways to answer budget questions through programs, not simple dollars.


First, about what cities do and don't do: Contrary to what Eugster asserts, cities have always engaged in much more than his list of basic services. Providing amenities, from parks to golf courses to youth activities to the arts, has always been a significant part of what cities do.


Nor has economic development been ignored. We call it boosterism, and most American cities have always engaged in it, especially in the West, where isolation could only be countered through advertising. Why should anyone be interested in visiting Spokane or living here? Why Boise? Why Missoula? Enter the boosters. From parades to flags to lobbyists to public relations firms, cities have long marshaled resources to paint a positive picture.


Interestingly, boosterism, for all its faults, has left us more than a few notable accomplishments. Why, for example, did Spokane manage to build the city park system it now enjoys? Enlightened leadership? Well, actually no. Just after the turn of the century, parks were the cause celebre of booster types all around town. And it wasn't just here in Spokane; any city worth its salt tried to outdo the next city with acreage and aesthetics, bringing the Olmstead brothers' firm lots of business.


Also back in those days, city governments throughout the Western United States built opera houses and theaters, not necessarily because the town fathers were patrons of the arts but because the fathers knew that the city down the road was building a new house. Truth to tell, city leaders discovered that opera houses and parks could be more important to civic health (and certainly growth) than street repairs or even sometimes police protection.


Along with our parks and golf courses, the World's Fair, the Ag Trade Center, the Arena all have served the boosters' agenda. They establish that Spokane is a going city -- a great place to visit or live -- and that's the point.





When you look at Boise's budget, Spokane's numbers stand up rather well. Our burg actually spends a slightly higher percentage of its operating budget on police: 31 percent to Boise's 26 percent. As for fire protection, the two cities allocate about the same percentage.


Boise, however, is worth studying because it has a strategic plan, which helps guide decisions on the scope of city government. In Boise, quality of life -- hardly something that can be reduced to police, fire and roads -- leads the list of priorities. The government should go about "promoting environmental integrity, economic stability, fostering community and neighborhood well-being." Customer services also are high on the list of priorities, as is equity and justice. Fiscal responsibility is also essential. The city is also asked to promote community identity.


Spokane finds itself in a fiscal bind; that said, there is no worse way to make a budget decision than in a vacuum. Due to our budgeting system, however, we are left with no other choice. At the root of our immediate problem is the absence of anything approaching a program-budget capability. In other words, budget decisions should not be driven by raw dollars, but by an understanding of what those dollars are buying.


Former Mayor John Talbott tried to get at this problem but ran out of time. As he properly understood, Spokane is held prisoner to a traditional line-item budget model, which increases incrementally and can therefore only be reduced incrementally. Talbott sought an independent auditor's office, as they have in Portland, to provide decision-makers with impartial information on how well their expenditures are delivering services. Without such an institution (which can also be contracted out, as many cities do), information is often skewed by interested parties, and financial decisions wind up being reduced to shaving off a percentage here or there without any real idea of where percentages really ought to be shaved. It's government in a vacuum.


One could argue, given our relatively high crime rate compared to a city like Boise, that we need a far bigger police budget. But we can't make that decision unless we know what it is we want by way of "policing."


We run a licensing and permitting operation, but we have no criteria whereby we can determine whether we are accomplishing our program objectives -- because we have no program objectives. Do we run an efficient operation? Who knows?


Or take the very controversial budget item of Human Services. How much is enough? We don't know. Each year, a long list of claimants scramble over an ever-shrinking pool of dollars. But what are the strategic program needs? Identify those and we can fix program priorities, by which budget cuts can be driven.


Periods of budget shortfalls actually offer leadership opportunities to reorder priorities. And this takes me back to the singular importance of program-budgeting. I don't mean to suggest that we can design a program budget like some kind of software that can just do all the calculations for us; it's still more of an art than a science. But attention to the programs in question can sharpen the flat picture presented by traditional line-item presentations.


At the very least, such an approach offers an entry point to informed deliberation. We sorely need it.