Budgeting and Forecasting

Prioritizing Community Values in Capital Budgeting

Image from June 2021 GFR

Over the past year, many communities have started to understand the ways in which local policies have the potential to affect communities. Whether it be policies on imposed fees and fines, zoning or land use regulations, economic development incentives, or policing strategies, there is potential for disadvantaged neighborhoods and select demographics to face challenges not found in the larger population. As a result, an increasing number of local officials are re-evaluating the equity impacts of their operations and investments— and often within programs historically managed by technical experts.

The capital budget, which funds infrastructure construction, rehabilitation, and maintenance, is one such program. Although capital investment decisions are often made among analysts, engineers, and asset managers, they have real social impacts: raising local property values, reducing injury, and developing public spaces that provide a wealth of community benefits.

Failing to consider equity impacts in these programs threatens to perpetuate inequality, leading many budget managers to wonder how we can put our equity values to work in capital planning and budget development. Luckily, other budget managers have already confronted this challenge. The City of Oakland, California, was the first government in the United States to include racial equity as a formal (by council resolution) scoring criteria applied universally to all capital projects, regardless of asset type.

Within the new CIP development methodology, great care was taken to center a racial equity analysis in the design of an inclusive public engagement strategy and capital project prioritization system to address racial and social inequities in the city. This case study from Oakland highlights how one local government began to reimagine its standard procedures to address caustic social inequity.