Shifting Priorities: Participatory Budgeting in New York City is Associated with Increased Investments in Schools,Street and Traffic Improvements,and Public Housing

ABSTRACT

In participatory budgeting (PB), residents instead of public officials decide how public money is spent. PB may reveal that residents prioritize different investments than public officials, which could lead to more socially just spending. However, little research has examined whether and how PB shifts spending priorities. This study leverages publicly available records on New York City council districts’ capital project allocations over ten years (2009 through 2018), comparing spending within and across PB and non-PB districts. Multi-level regression models show that, on average, when council districts adopted PB, greater proportions of their discretionary capital budgets were allocated to schools, streets and traffic improvements, and public housing. PB was associated with decreases in spending on parks and recreation projects and housing preservation and development projects. The article shows that priorities shift when residents are directly involved in budgeting. Implications for equity and community well-being, and directions for future research are discussed.     

Beyond Inclusion: Critical Race Theory and Participatory Budgeting

Critical Race Theory (CRT) researchers maintain that mainstream liberal discourses of neutrality and colorblindness inherently reify existing patterns of inequality, and that privileging the voices of people of color and the marginalized is essential to addressing issues of equity and equality. Participatory budgeting (PB) aims, too, to include the voices of the marginalized in substantive policy-making. Through a CRT lens, I examine the ways in which the New York City PB process has thus far worked to simultaneously disrupt and maintain racial hierarchies. I pay particular attention to how social constructions of the “good project” shape the discourses around community priorities and winning projects—especially in the areas of security/policing and education. While the New York PB process has successfully reached out to and effectively enfranchised traditionally marginalized constituents, including communities of color, its current focus on districts and the voting phase, alongside limited work on critical praxis, limits the extent to which these newly enfranchised constituents can problematize larger funding formulas and criteria in public budgets.     

Mutual efforts for mutual trust: Impacts of citizens' knowledge and governmental communication channels on trust in participatory budgeting

Since participatory budgeting (PB) has been advocated by both theorists and practitioners of public administration, its adoption has become a global phenomenon. As of 2017, all local governments in South Korea are legally mandated to operate a PB system as a policy for inviting citizen participation in local budget decision-making. Using an impact assessment tool completed by PB managers in local governments, this research tested two sets of independent variables—citizens' participatory capacity and the diversification of communication in the PB process—that could be associated with the dependent variables “citizens' trust in government (CTG)” and “government officials' trust in citizens (GTC).” The paper presents the three major findings on the common drivers behind CTG and GTC: (1) citizen participants' knowledge on budget and budgeting process; (2) local government's efforts in gathering citizens' inputs for PB; and (3) the mutual efforts to understand the needs and limitations of both citizens and the local government. The paper concludes by exploring the implications for the design and delivery of effective PB implementation.     

Immigrant Engagement in Participatory Budgeting in New York City

Participatory Budgeting (PB) is a welcome experiment in participatory democracy in New York City (NYC), one that could produce greater civic engagement of traditionally marginalized groups and more equitable resource distribution. By engaging immigrants, PB aims to affirm and elevate their voices, help develop their civic capacities, and promote their political participation and community empowerment. During the past four years, participation by immigrants (foreign-born residents) in New York City’s PB process (PBNYC) has steadily increased, growing from nineteen to twenty-eight percent of all PB voters. Yet, immigrant participation lags compared to their numbers, with great variation among PB districts. Using a mixed methods approach that incorporates surveys of and interviews with immigrant community members, staff at immigrant serving community-based organizations, and City Council staff, this article aims to parse out the logistical and affective barriers to participation immigrants face in PB districts and how PBNYC’s design attempts to circumvent said barriers and facilitate participation. Ultimately, our study reveals a complex mix of promising practices and structural constraints involved in working toward PB’s “inclusive” and “equitable” aims.     

These rules are made for spending: testing and extending the law of 1/n

What is the influence of the rules of political representation on local spending? This research tests the law of 1/n in the Portuguese local context and finds that the law fails to apply. We suggest an alternative measure—the density of representation—to assess the impact of the rules of city council representation on local public expenditures. Density of representation is defined as the number of elected officials in the city council divided by city population. We find an S-shaped relationship between the density of representation and the level of local government expenditures. The level of municipal spending initially declines with increases in the density of representation, reflecting an increase in the ability of constituents to monitor their elected representatives. At higher levels of representation density, the relationship becomes positive, suggesting that the dynamics of the budgetary commons become salient. The relationship becomes negative again for extremely high density of representation owing to increases in the transaction costs of legislative decision-making. This paper discusses the implications of our findings for the reform of local government institutions and the rules of political representation.     

Growing Grassroots Democracy: Dynamic Outcomes in Building New York City’s Participatory Budgeting Program

Within five years of its launch, Participatory Budgeting in New York City (PBNYC) spread from four to thirty-one of New York’s fifty-one council districts, enabling city residents to directly allocate thirty-eight million dollars in public funds. During this period, PBNYC’s neighborhood-level forums remained largely unchanged, but, in order to sustain growth, administrative shifts altered the institution’s basic design. This article examines how and why this transition affected the degree of popular control afforded by PBNYC, specifically within its cross-district Steering Committee. Analysis of original interviews and organizational documents indicates that the transition brought important, if modest, gains but impeded aspects of community empowerment through bureaucratic resistance and imbalanced governmental-civil society roles. Key players responded by reforming PBNYC’s internal governance. This case sheds light on the factors that shape participatory institutions and their impacts, emphasizing the dynamic interactions between actors and the resulting gains and losses that aggregate toward longer term outcomes.     

Management Strategies and Budgetary Politics

The study of public sector budgeting, particularly at the state level, has been dominated by incremental models of decision making. As a result, the budget has not always been viewed as an effective management tool for governors and other senior state officials. However, there are several critical issues which state leaders repeatedly face and for which the budget is the principal instrument for implementing decisions. This article identifies four key issues for the strategic management of state government and relates alternative approaches to each issue to the nature of budgetary politics. The first section raises the issues in the form of four questions. The next sections present alternative answers and discuss their political implications. Where appropriate, examples from the state of New York are included.     

When is Growth Not Growth? The Curious Case of Mental Health Budgeting in New York

This article argues that the adverse impact of Medicaid on state budgets alleged in various public debates has been overstated, in some measure because of the inaccurate and misleading manner in which Medicaid expenditures are appropriated in state budgeting systems. Data on Medicaid and mental health spending in the state of New York is used for analysis. The first section provides a Medicaid spending and budgeting background. The second section discusses Medicaid and mental health in New York. The third section describes actual budgeted spending for mental health in New York, and the final section provides a discussion and concluding comments.     

Budget Control in Virginia Public School Districts

This article examines the selection and use of a budget approval technique. Specifically, two research questions are addressed: (1) Does the use of a particular budget approval method by a governmental body impact the execution of the budget? (2) What characteristics of a local government are associated with its decision to use a particular budget approval method? Both research questions are addressed by analyzing data from public school systems in the Commonwealth of Virginia, specifically, whether using categorical budget approval differs in the accuracy of budgeting versus using a lump-sum approval method. Characteristics of Virginia school districts are also analyzed according to whether any of them are likely to be associated with school districts using a particular approval method. The remainder of this article is organized as follows: the next section describes the role of budgeting control in schools; subsequent sections review Virginia school district budgeting practices, develop the empirical model used to test the hypotheses, describe the sample, analyze the results of empirical tests and discuss implications of the findings.     

Drivers and Consequences of Citizen Satisfaction: An Application of the American Customer Satisfaction Index Model to New York City

Using data from two telephone surveys of New York City residents conducted during 2000 and 2001, this article employs the American Customer Satisfaction Index (ACSI) model to examine the drivers—and behavioral consequences—of overall satisfaction with local government services. While the ACSI model has been widely used to analyze customer satisfaction in the private sector and, more recently, in the federal government, it has not been tried in a local government context. Applying the ACSI model to New York City, we find the perceived quality of public schools and especially the police, as well as road conditions and subway service, are the most salient drivers of satisfaction, but the significance of each service varies across income, race, and geography. For all groups in the city, overall satisfaction drives both trust in local government officials and intentions to move out of the city. Advantages and limitations of using the ACSI model to assess the quality of local government services are discussed.     

State budget periodicity: An analysis of the determinants and the effect on state spending

Much of the public budgeting literature focuses on the institutional rules of budgeting and how those rules affect process and outcomes. This study focuses on a particularly rudimentary rule of budgeting: the length of the budget period. State budgets are dictated (constitutionally or statutorily) to recur over one-or two-year intervals. Statistical analysis of the determinants of state budget periodicity shows that the more states spend, ceteris paribus, the more likely they are to budget annually. I hypothesize that budget periodicity has the opposite effect on spending: Biennial budget states spend more, ceteris paribus, than annual budget states spend. Ordinary least squares analysis does not support the hypothesis, but with instrumental variable methods, biennial budgeting exhibits a positive and statistically significant effect on state spending.     

Perceptions of council member–department head interactions in local government

In this article, we use data collected from municipal council members and department heads in Michigan municipalities with over 10 000 residents to determine how, and why, they view the quality of their interactions with one another. Building theories of small group dynamics and political control of bureaucracy, we test several hypotheses and conclude that council members and department heads hold divergent views of their interactions with one another and that their views are determined by government form and community characteristics. We conclude with simple steps that local government officials and administrators can take to improve their small group dynamics and governing performance. Copyright © 2016 John Wiley & Sons, Ltd.     

The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending

This article demonstrates the impact of public officials’ corruption on the size and allocation of U.S. state spending. Extending two theories of “excessive” government expansion, the authors argue that public officials’ corruption should cause state spending to be artificially elevated. Corruption increased state spending over the period 1997–2008. During that time, the 10 most corrupt states could have reduced their total annual expenditure by an average of $1,308 per capita—5.2 percent of the mean per capita state expenditure—if corruption had been at the average level of the states. Moreover, at the expense of social sectors, corruption is likely to distort states’ public resource allocations in favor of higher‐potential “bribe‐generating” spending and items directly beneficial to public officials, such as capital, construction, highways, borrowing, and total salaries and wages. The authors use an objective, concrete, and consistent measurement of corruption, the number of convictions.     

Budget institutions and taxation

While a number of different studies have explored the effects of budgetary procedures and the centralization of the budget process on government debt, deficits and spending, few of them have explored whether such fiscal institutions matter for public revenue. This article argues that centralizing the budget process raises the levels of taxation by limiting the ability of individual government officials to veto tax increases in line with common-pool-problem arguments regarding public finances. Using detailed data on budgetary procedures from 15 EU countries, the empirical analysis shows that greater centralization of the budget process increases taxation as a share of GDP and that both the type of budget centralization and level of government fractionalization matter for the size of this effect. The results suggest that further centralizing the budget process limits government debt and deficits by increasing public revenues as well as constraining public spending.     

Fiscal effects of budget referendums: evidence from New York school districts

This paper provides empirical evidence on how budget referendums affect school inputs by taking advantage of an exogenous enactment of budget referendums for small city school districts (SCSDs) in New York State in 1998. The paper shows that SCSDs reduce instructional spending and increase student-teacher ratios while preserving administrative spending in response to budget referendums. These empirical findings are obtained by difference-in-differences estimations on data processed with propensity score matching, and the results are robust to sensitivity analysis.     

Participatory Budgeting in Australian Local Government: An Initial Assessment and Critical Issues

Participatory budgeting (PB), a process whereby governments seek direct input from citizens into financial decisions, is gaining a foothold in the community engagement practices of Australian local governments. Following questions of definition, we survey the theoretical terrain, locating PB within several components of local democracy. We then provide details of six PB processes in New South Wales, Victoria, and Western Australia. We identify several questions for the future of PB in Australian local governments, including the role of deliberative practices as part of the broader work of councils, the issue of the adaptability of councils and leaders, the impacts upon state and local governments, and the role of third parties. The article concludes by reflecting on how PB sits with democratic practices at the local level if it continues to be implemented.     

The road to power: partisan loyalty and?the centralized provision of local infrastructure

This paper sets out a simple dynamic probabilistic voting model in which a government allocates a fixed budget across electoral districts that differ in their loyalties to the ruling party. The model predicts that the geographic pattern of spending depends on the way the government balances long-run ??machine politics?? considerations and the more immediate concern to win over swing voters. Empirical results obtained from a panel of electoral districts in Québec provide robust evidence that districts which display loyalty to the incumbent government receive disproportionately more spending, especially close to an election, at odds with the standard ??swing voter?? view.     

Can the Use of Recommended Procurement Practices Save Money?

Procurement is an essential business function of government. Despite the importance of effective procurement practices to government efficiency, very little is known about what local governments do in practice, and how procurement practices affect government spending. This paper reports the results of a survey on procurement practices used by New York State school districts. To examine the potential costs savings from adoption of particular procurement practices, the authors estimate cost models for materials, supplies, and equipment spending. Results from the cost model indicate that the use of competitive bidding, purchasing calendars, central warehouses, and bidders lists are associated with significant cost savings.     

Do State‐Funded Property Tax Exemptions Increase Local Government Inefficiency? An Analysis of New York State's STAR Program

This study tests the effects of a growing form of indirect state aid—state‐supported property tax exemptions—on local government efficiency. We hypothesize that larger exemptions, by lowering the effective tax price paid by local homeowners and thus their incentive to monitor efficiency, will reduce local government efficiency. We test this hypothesis by examining the introduction of New York State's large state‐subsidized property tax exemption program, which began in 1999. We find evidence that, all else constant, the exemptions have reduced efficiency in districts with larger exemptions, but the effects appear to diminish as taxpayers become accustomed to the exemptions.     

Budgetary Practices in Smaller Units of Government

Budgetary practice in smaller units of local government has not been the subject of systematic examination. A survey of 122 towns, villages, and cities less than 25,000 population in upstate New York was conducted in spring 1987. This survey indicates that most key policymakers are satisfied with current practices and have been involved with budgeting for more than three years. Budgetary innovation has affected smaller governmental units, and the actual application is related to the educational levels of the official charged with budget preparation.