Right or wrong, the planning horizon for city operations is 12 months. Plan and budget preparation begins somewhere around 9 months before the end of the fiscal year.
Drafts are circulated around 5 months before, the public comments period ensues, and final “go” is about 1 month before fiscal year end.
Then the clock starts again and the next opportunity for change is 12 months away.
That’s what makes the budget process so crucial for strategy change. Leaders, administrators and legislators talk about ideas all the time, but it is only what made it into the budget that ultimately matters.
Restructuring unlocks budget improvements
In Louisville, we’ve already outlined a recommended restructuring to Louisville Metro government around 4 key strategy areas to drive strategy, culture change, and leadership focus.
Here we restructured the budget, based on the current FY22 Budget ending 6.30.22, into the 4 strategy areas:
Without changing spending levels at all, a refresh of ideas, talent, resources across these topics, with a new lens of equity and innovation, is possible within these four strategy areas.
For instance, Community Health & Safety has considerable room for reallocations toward Health and Health-related activities that address root causes and support higher incomes related activities for poverty alleviation.
I’ve been told by key members of the city’s governing council that it will be very important to maintain transparency in these changes. In business terms, that means doing sub-accounting within these four departments to allow the public to track how historical spending has shifted to new approaches and uses.
Reallocations within the Safety-related areas could drive smarter investment and therefore efficiencies. Leadership could explicitly target 10% cost efficiencies for each department and reinvest that full amount in competitive wages, training and advancement opportunities for first responders and all government employees.
A third-party equity audit can jumpstart the dialogue
Leadership can commission a credible third-party expert to perform an equity audit of the budget day 1, to identify supportive and destructive programs and policies. A national expert like HRA Advisors is working on equity in cities around the country and has a record of such audits.
This should include extensive community meetings in collaboration with the city council in the months before budget season begins to open a dialogue on relative spending across the departments, spending inside the departments, ideas and innovations. A carefully planned, more consensus level budget would then be submitted to then undergo the public comment period.
Increased revenues invested strategically in historically disinvested neighborhoods
We’ve said before , unlocking growth potential in Louisville is possible by changing what we stand for as a city and whether success is for everyone, not just the usual suspects. If the conditions for equity are present, growth becomes immediately possible for Louisville. Our 10-point economic development plan, combined with more strategic management and smarter spending, will generate this growth.
A budget for 20% economic growth in the first term would free up $440 million (one year to generate growth and three years of growth thereafter, that can be allocated to housing, quality child care and support of small businesses in the City’s most challenged neighborhoods (Qualified Census Tracts in West and South Louisville), plus aggressively seek matching federal and state funds as a multiplier of this investment.
I've come to believe that planning for 12 months is plenty when you understand the true role of the budget process in change, but am looking forward to learning from others how they see the process working best