Next Year’s Starting City Hall Budget: $0

Likely next mayor Jim Kenney plans to make departments justify every last dollar.

"I know that pension fund is in here somewhere." |

“I know that pension fund is in here somewhere.” |

Government budgets are a lot like basements: there’s really vital stuff in there, but plenty of crap as well. As the years grind on, the basement gets ever messier, ever more jammed and ever more unwieldy. What’s all that stuff for? Do we really need all of it? After a while, nobody really knows.

But who wants to sort it out? What a nightmare.

And yet, that’s exactly what Democratic mayoral nominee says he Jim Kenney intends to do if elected mayor in November. And if he’s upset by ultra-underdog GOP nominee Melissa Murray Bailey, well she plans to do the same.

Both are advocates of what’s called zero-based budgeting. It works like this: instead of creating a budget based on last year’s spending plan, as is the norm, city departments would have to start from scratch. With a zero-based budget, departments and agencies would be asked to articulate their mission and priorities, then justify every dollar they request based on how effectively a given program advances the mission.

Zero-based budgeting is not a particularly new idea, and it’s not a panacea for financially strained governments. It costs a lot of money to run a big city, and a new budget system can’t change that reality. But when done well — which is a big qualifier — zero-based budgeting can reduce wasteful spending, make government a bit more more efficient and help departments shed work they shouldn’t be doing, and focus more clearly on the stuff that matters most.

In most years, only a tiny fraction of City Hall spending is examined closely. This isn’t just a Philadelphia thing. Most governments operate the same way. Department budgets tend to go up fractionally in good years, and they tend to go down fractionally in bad years.

And that’s just fine, most of the time. Garbage collection, for instance, isn’t going to go away as a City Hall priority no matter how much budget thumbsucking the next mayor requires. And it’ll probably cost fractionally more in 2016 than it costs in 2015.

But in any big government budget, there are going to be odds and ends that don’t make sense any more: the municipal version of that broken ice cream maker in the basement. And every so often, it actually does make sense to think long and hard about the delivery of basic municipal services like trash collection.

This isn’t necessarily about spending less money overall, particularly in a city like Philadelphia, where there are so many big and obvious needs. But zero-based budgeting can help redirect resources to where they are needed the most. To stretch that basement metaphor a little further: cleaning out the junk can make it just a little bit easier to work on the real problem of that cracked foundation.

“Zero-based budgeting helps ensure that taxpayer money is well spent, while also asking departments to regularly evaluate if all of their programming provides effective and efficient services,” says Kenney campaign spokesman Lauren Hitt. “Evaluating department performance, and the effectiveness of government spending, is critical when we’re working with limited resources.”

Murray-Bailey’s campaign is more pugnacious: “The city of Philadelphia has been wasting taxpayer money for years because of the influence of entrenched interests in the city’s government, and through the zero-based budgeting approach it would allow her to stand up to these interest,” says Murray-Bailey policy director Tom Kurek.

Locally, the best example of an effective zero-based budget is in Montgomery County, where, in 2012, a newly elected trio of County Commissioners led by Josh Shapiro inherited a $10 million deficit. They gave county CFO Uri Monson real authority and political backing. He needed it. Zero-based budgeting can be a painful and difficult process for government workers, and for the constituents who benefit from the programs that are ultimately deemed expendable.

“It’s about matching up funding to really meet your mission,” says Monson.

Departments must articulate their goals and determine what it will require to meet those objectives. Programs that move the needle are funded, and those that don’t or are tangential to the mission will be scrapped. “The advantage of zero-based budgeting is that you get rid of the ‘we’ve always done it that way,” Monson says.

That’s the theory, anyway. But, Monson warns, the whole thing is pointless without political leadership that’s willing to actually follow through on the often difficult changes a good zero-based budget process yields.

Can Jim Kenney be that leader? Larry Platt asked that question a few weeks ago at the Philadelphia Citizen. He’s skeptical.

Kenney was mostly a risk-averse City Councilman. Taking a look at each line item in a $4 billion budget and asking, “Does this fit our core mission?” would mean standing up to his own constituencies, which includes union workers and patronage appointments.

I’m not going to guess one way or the other how likely a future Mayor Kenney would be to “stand up.” But I agree with Platt that what Kenney does or doesn’t do with zero-based budgeting will be one key early test of what sort of mayor he will be.

How quickly does Kenney want to do this? Soon. Too soon, probably.

“He’ll begin implementation in his very first budget,” Hitt says. “Because he has to present that budget very shortly after he takes office and there’s an extensive amount of analysis required to implement a new budgeting system, it must be phased-in, but Jim is committed to it.”

Done right, zero-based budgeting is hard. Any first-year stab at it would inevitably be window dressing. But it’s not unreasonable to think that by 2017 — if it’s legitimately a priority — a Kenney (or Murray-Bailey!) administration could roll out a zero-based budget with impact.