How to Budget for Equity and Drive Lasting Change

After George Floyd’s tragic death last year sparked calls to “defund the police,” government leaders across the country looked at all their operations under a new lens of equity. Most importantly, state and local leaders examined ways to invest in equitable services. While it is often said that government budgets are value statements, the past year has revealed that many budgets need to be revisited so that they better demonstrate the values of the people they serve.

To address misalignments between government spending and community values, leaders should focus on budgeting for equity, which has four fundamental facets: prioritizing equity, using data and evidence, budgeting for outcomes and engaging the community in new ways.

Prioritize Equity

Budgeting for equity cannot be separated from governing for equity. Equity is part of an organizationwide and communitywide cultural shift that begins with a shared understanding of what equity means, the root causes and consequences of inequity, and why advancing equity is important. Achieving consensus around the moral imperative of equity requires leadership and conversation.

Cook County, Illinois Board of Commissioners President Toni Preckwinkle has said that at its most basic level budgeting for equity means “you prioritize spending where it makes the most impact, addresses the greatest need and repairs past harms.” It is also incumbent upon leaders to make the case that government action to advance equity is good for everyone. For example, while investments to improve preschool learning may be targeted to children of color, research shows that such investments benefit other children and make entire communities more prosperous.

Use Data and Evidence

Data and evidence are important components of any efforts to address racial equity because they allow governments to pinpoint disparities, establish goals to remedy them and find solutions that work. This means that government leaders should be using data to evaluate not just “How well did we do it?” and “Is anyone better off?” but also consider the question “Is everyone better off?”

Asking “Is everyone better off”? is what led Boston officials to take a deep dive into its sidewalk repair data. Analysts found that because repairs were driven by 311 complaints instead of an objective assessment of need, the sidewalks in poorer, minority neighborhoods were in worse shape than those in wealthier parts of the city. Boston now uses a sidewalk condition index and other need-based factors to prioritize its sidewalk capital program.

Similarly, evidence can help governments address more long-standing inequities such as kindergarten readiness. In Maryland, for example, 60% of white students were ready for kindergarten in 2019 compared with 42% of Black students and 26% of Hispanic students, a readiness gap that has widened in recent years. Although Maryland has acted to expand early childhood education, the root cause of the disparity starts before childbirth, when the health and preparedness of mothers can make or break early childhood outcomes. 

Evidence-based upstream interventions, such as Nurse-Family Partnership programs, help improve early childhood educational outcomes by supporting low-income, first-time mothers from pregnancy through the child’s second birthday. Initiatives like these can help to address long-standing inequities, and governments can use clearinghouses, such as Results for America’s Economic Mobility Catalog, to identify evidence-based strategies to address a wide variety of these equity-related gaps.

Budget for Outcomes

Evidence can also help policymakers reorient budgets around equity. For example, Minnesota’s 2020-21 budget includes $87 million in new money for programs that are proven to reduce criminal behavior, increase housing stability, prevent substance abuse and address other issues that drive disparities. San Antonio is using an Equity Atlas and a budget equity tool to help departments look at their budgets from the perspective of marginalized communities.

Similarly, Baltimore’s Budgeting for Outcomes initiative, detailed in City on the Line, is an example of how taking an outcomes-focused approach can improve results. By allocating dollars to outcomes instead of departments, Baltimore was able to avoid across-the-board cuts during the Great Recession, and instead repurposed funding from lower-value services to those that demonstrated results, such as violence interrupters and summer youth employment.

Engage the Community in New Ways

Even budget deliberations that happen in plain sight, like council hearings and town hall meetings, tend to be dominated by the “usual suspects”—well-to-do neighborhood associations, single-issue advocates and business interests. People from underrepresented communities are usually absent, outnumbered or out resourced.

Achieving equity requires meeting people where they are. This means not just holding meetings in libraries and rec centers, but also designing engagement strategies with community organizations, going to neighborhood events and even knocking on doors. 

Extending personal invitations to diverse stakeholders is key to broader participation. Just because a meeting is open does not mean everyone feels invited or welcome. Mecklenburg County, North Carolina, used a full engagement continuum to improve resident involvement with budget decisions.

As the nation reckons with issues of race and social justice, government leaders at every level have an opportunity to bring about a more equitable society. Budgeting for equity is an essential tool for achieving this great ambition. The playbook for budgeting for equity will evolve, but governments can move forward by prioritizing equity, using data and evidence, budgeting for outcomes and engaging the community in new ways.