The 5 Principles of Priority Based Budgeting & CPBB Teams with Toledo Regional Chamber to Bring Priority Based Budgeting to the City of Toledo, Ohio

The Center for Priority Based Budgeting (CPBB), is now working with the City of Toledo to bring priority based budgeting to the city. What is extremely unique about this venture is that this project was made possible with partnership and financial assistance from the Toledo Regional Chamber. This represents the very first P3 (public-private partnership) priority based budgeting project in North America!

The City of Toledo is now the 3rd municipality in Ohio to implement priority based budgeting, joining the City of Cincinnati and the City of Blue Ash in this innovative approach to ensuring a city’s long-term financial sustainability and will ultimately allow the City of Toledo to also serve its residents in the most effective, efficient and fiscally responsible manner possible.

The underlying philosophy of priority based budgeting is about how a government entity should invest resources to meet its stated objectives. It helps us to better articulate why the services we offer exist, what price we pay for them, and, consequently, what value they offer citizens.

The principles associated with this philosophy of priority based budgeting are:

  • Prioritize Services. Priority based budgeting evaluates the relative importance of individual programs and services rather than entire departments. It is distinguished by prioritizing the services a government provides, one versus another.
  • Do the Important Things Well. Cut Back on the Rest. In a time of revenue decline, a traditional budget process often attempts to continue funding all the same programs it funded last year, albeit at a reduced level (e.g. across-the-board budget cuts). Priority based budgeting identifies the services that offer the highest value and continues to provide funding for them, while reducing service levels, divesting, or potentially eliminating lower value services.
  • Question Past Patterns of Spending. An incremental budget process doesn’t seriously question the spending decisions made in years past. Priority based budgeting puts all the money on the table to encourage more creative conversations about services.
  • Spend Within the Organization’s Means. Priority based budgeting starts with the revenue available to the government, rather than last year’s expenditures, as the basis for decision-making.
  • Know the True Cost of Doing Business. Focusing on the full costs of programs ensures that funding decisions are based on the true cost of providing a service.
  • Provide Transparency of Community Priorities. When budget decisions are based on a well-defined set of community priorities, the government’s aims are not left open to interpretation.
  • Provide Transparency of Service Impact. In traditional budgets, it is often not entirely clear how funded services make a real difference in the lives of citizens. Under priority based budgeting, the focus is on the results the service produces for achieving community priorities.
  • Demand Accountability for Results. Traditional budgets focus on accountability for staying within spending limits. Beyond this, priority based budgeting demands accountability for results that were the basis for a service’s budget allocation.

The core CPBB concepts of Fiscal Health and Wellness through Priority Based Budgeting are truly inspiring a new wave of municipal fiscal stewardship. A complete revolution in how local governments utilize their limited resources to the benefit of the communities they serve.

The Toledo Chamber’s jointly funded venture with the City is the first of its kind public-private partnership in the world to bring Priority Based Budgeting into a community. Certainly across the United States, as cities become more adept at gathering and measuring data, at putting data to use to create safer and healthier cities with thriving economies, indeed as cities are becoming “smart cities” it is this kind of multi-sector collaboration that is driving an optimistic future.

There was an era when local government took on the responsibility of upholding our basic societal contracts, and our core civic duties, as it was the only institution capable of doing so. With the proliferation of non-profit organizations, and mission-driven organizations in the private sector, it has become clear that there are many, many stakeholders in our cities whose aim is also to enhance our safety, our health and well-being. It is through public-private partnerships like the City’s with its Chamber in this case that will profoundly reshape the way your City optimizes the use of its citizen’s resources towards a better Toledo. We couldn’t be more proud than to be part of this team.

- Erik Fabian,

Chris FabianComment