Budget Better: Bet On Budding Efforts

(November 2018)

Spend a dollar today to save more than ten dollars tomorrow. It sounds too good to be true. But if we budgeted better in Philadelphia, such an initiative could be an incredibly wise investment in the city's future. How do we make sure that we are making smart municipal spending decisions and not paying into a policy Ponzi scheme? By creating a budget process where we articulate goals, track outcomes, and keep score.

Last week, the Philadelphia Bar Association released a report that claims that by providing legal counsel to low-income tenants at risk of eviction, the city could avoid higher future costs that would be incurred resulting from the evictions. Here's how the Bar Association puts it:

"A new study, Economic Return on Investment of Providing Counsel in Philadelphia Eviction Cases for Low-Income Tenants, which was commissioned by the Association and conducted by Chicago-based Stout Risius Ross, LLC (Stout), estimates that spending $3.5 million annually to provide legal counsel for low-income tenants at risk of eviction would save the city approximately $45.2 million annually. The study concludes that for every dollar the city spends on providing legal representation to low-income tenants, the city will receive a benefit of at least $12.74."

In reaching the conclusions, the Bar Association found that Philadelphia eviction rates are much higher than the national average and that tenants without legal representation were disruptively displaced due to eviction in four of every five cases, compared with represented tenants who were disruptively displaced due to eviction in only one of every twenty cases. By expanding legal representation, more than 14,000 low-income individuals each year would avoid a disruptive displacement, which would save City of Philadelphia some of the tens of millions of dollars the city currently spends in emergency-housing costs and expenditures related to medical care and court time to deal with unnecessarily evicted individuals and families.

This is the language and the approach that can represent a better method of public budgeting. Our public resources are limited and in making decisions about how to spend those scarce public dollars, we -- the public -- need information. Crafting public budgets based on what we spent in previous years makes little sense, but that's what we do each year in Philadelphia.

We do not want to be spending money to just keep agencies doing what they have always done. We want to be spending money to solve the city's problems and improve our lives. Spending that is not solving problems or improving our lives is simply waste.

Instead, if we can build our budgets by articulating our aspirations for a better city, we can then propose funding efforts that will reduce the problems we face and realize our goals. If we measure the results of our spending, we can determine whether our expenditures are making an impact. Then, we can decrease spending in areas that are proven ineffective and increase spending in areas where we are making a difference. It is a virtuous cycle that can save tax dollars while producing the results taxpayers deserve.

If spending more effectively on eviction prevention can better serve Philadelphia residents and better save budget money, we should make that investment as soon as we possibly can -- and we should track the results to be sure that the spending is creating the positive results we are looking to see. But we should not stop there. We should extend that same thinking to the entire city budget. If we craft our budget in the same manner for all expenditures, we can make the city budget make sense for Philadelphia and make a better Philadelphia for all of us who are counting on city spending to make a positive difference in our lives.