Putting the money in citizens' hands

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Even as he prepares to leave the City Council, Nick Licata is plunging ahead with the exploration of an innovative concept: a crowd-sourced budget plan known as participatory budgeting.

Participatory budgeting is what it sounds like: The Participatory Budgeting Project — a New York-based nonprofit that promotes the practice — calls it a “democratic process in which community members directly decide how to spend part of a public budget.”

This “bold experiment,” as Licata calls it, could take some time to flesh out, but a strong show of support from fellow council members, as well as from members of the City Neighborhood Council, suggests the idea could take off here, regardless of Licata’s exit at the end of the year (he decided last month against seeking re-election).

Participatory budgeting is a relatively new idea. The process was born in Porto Alegre, Brazil in 1989 as an experiment in advanced democracy. Promoted by the leftist Workers’ Party in Brazil, the end goal was a resurgence of socialism. The idea quickly took hold and spread, first through Brazil, then elsewhere in Latin America, Europe, Asia and now North America.

In some Latin American countries, some use of participatory budgeting is mandatory. According to Benjamin Goldfrank, professor at Seton Hall University’s School of Diplomacy and International Relations, there are now many thousands of municipalities around the world who use some form of participatory budgeting.

How participatory budgeting works, exactly, is difficult to define. Ultimately, the process is determined on a city-by-city, district-by-district basis. For Seattle, Licata admitted at a recent public meeting on the idea, “I don’t know where it’s going to end up.” But he and Councilmember Sally Clark were intrigued by Boston’s model, which allows youth ages 12 to 25 to decide how some funds are spent. They have directed much of the money there to parks and sidewalks.

The basic structure begins with a pot of money, either newly created by taxes or taken out of the existing city budget. Use of that money — usually just a small portion of the overall budget although Port Alegre sets aside 20 percent — is turned over to the public. Citizens hold meetings and town halls to come up with a list of projects they’d like to see accomplished. For example, at the recent Seattle discussion, one woman said she is having issues with her building on Queen Anne she’d like to see fixed. A Wedgwood woman would like more streetlights and sidewalks in her neighborhood. Under participatory budgeting, the citizens then vote and the winning ideas get funded.

Participatory budgeting bears some resemblance to Seattle’s Neighborhood Matching Fund —also established in 1989, as it happens — which provides neighborhood groups with resources for community projects. The difference, however, is that in participatory budgeting, the money is already there for them to use and citizens do not need to solicit funds, as they do under the matching program.

For participatory budgeting to work, the city government must buy in: The money is given to, not taken by, the citizens. According to Goldfrank, cities that use the budgeting model have had generally strong political advocates who work within a decentralized form of government — often city councils. By this measure, Seattle would fit. Councilmembers Tim Burgess, Mike O’Brien, Sally Clark, Jean Godden, Kshama Sawant and Sally Bagshaw have all shown interest in the idea. While Licata has spearheaded discussion, Clark was confident that “there’s enough interest that someone on the council will take up the mantle.”

It also helps, says Goldfrank, if the city has pre-existing “civil society associations, preferably disposed to participate in municipal affairs, organized in networks, and relatively autonomous.” Again, Seattle fits the model: The forum was co-hosted by the City Neighborhood Council, a self-governing organization representing 13 Seattle neighborhood organizations. Laine Ross of the CNC sees participatory budgeting as a way to “empower Seattle communities by providing more access, inclusion…and control over the portions of the city budget.”

How much Seattle might invest is still unknown. Licata threw out $1 million as a hypothetical, but said “the decisions as far as where to do it and how to do it and the funding for it … would all have to be decided as we go along. This is not going to be a short process is what I’m discovering.”

Proponents of the process hold up Porto Alegre as their shining example of participatory budgeting at its best. Porto Alegre has had some form of participatory budgeting since 1989., devoting upwards of 20 percent of the total city budget to the process. As a result, the city has doubled sanitation efforts, putting its street-level sewage system underground. And the city’s health and education spending has more than tripled.

Participatory budgeting, sometimes called "PB," came to North America in 2009 in Chicago and Toronto. These two cities, as well as Boston, New York and St. Louis, use it on a district level. In New York, for example, 24 participating council members have some $1 million each to use for participatory budgeting (not all of the council members, who are elected by districts, take part). That money has funded computer labs, community gardens, school supplies, playground repairs, and more.

The difference, of course, between New York City and Porto Allegre is huge. NYC’s $25 million for participatory budgeting is a tiny part of the city’s $75 billion budget. And the New York council districts that use the money for participatory budgeting simply represent, as Licata said, “council members willing to give up political influence.”

In a best case scenario, said Goldfrank, “you get a lot of people excited, new people involved and new ideas and people benefit who may not have benefited before,” including underage people and non-citizens. The theory is that this excitement creates a feedback loop “where people voice concerns and they’re heard, then people want to pay more taxes and then there’s more money for PB.”

What no one has mentioned is that Brazil's Workers’ Party no longer promotes the budgeting approach as strongly as it used to. Ironically, the most active promoter is the fiercely capitalist World Bank. When, exactly, this shift occurred is unclear, but Goldfrank’s best guess is around 2003. Why World Bank officials support participatory budgeting depends on whom you ask. In Brazil, said Goldfrank, people see the World Bank’s support as encouraging citizens to “fight over crumbs.” He wrote in a 2012 publication, “At worst, PB is seen as…taming popular movements and teaching them to cooperate with elites rather than engage in direct action to destroy the state.”

Goldfrank said there seem to be two different camps of participatory budgeting supporters within the Bank. The first argue that the process promotes transparency. For participatory budgeting to work, citizens necessarily need to glimpse into city government and to understand how money is being spent. The second camp aligns more closely with the World Bank’s history of privatization. They say that when citizens realize how complicated budgeting is, they’ll support privatizing and turning over some services to NGOs and private institutions. For example, in Brazil, some funding for daycare went to private rather than state run entities.

The most likely scenario for Seattle is, like New York, a district level participatory budget. With the city’s switch to district elections this year, plus Seattleites palate for the word “socialism” (thank you, Councilmember Sawant), the timing could be good. Licata recentlywrote on his blog that he's looking to hold a second meeting on the issue soon.

Even on a presumably small scale — nothing like the 20 percent of the city’s budget dedicated Porto Alegre — it could spur greater involvement from a population which, as Goldfrank said, “doesn’t usually care about city government.” To hear council members and neighborhood coalitions talk, that inclusion may be more important than the scale of spending or the projects themselves.


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About the Authors & Contributors

David Kroman

David Kroman

David Kroman is formerly a reporter at Crosscut, where he covered city politics.