The Great Experiment:
By Mike McGrath
Civic Engagement and Fiscal Innovation in California
Cities everywhere are facing the worst fiscal crisis since the Great Depression, but California municipalities have been at it a lot longer. California was the testing ground for a grassroots tax rebellion that swept the country in the late 1970s and early 80s. A combination of economic volatility—booms and busts—and the lack of a statewide political consensus on fiscal policy has made local governance unusually dicey and difficult.
State government has been having a running budget crisis since around the time that Governor Gray Davis was recalled in 2003, and one of the strategies of subsequent governors, both Republican and Democratic, has been to exact “take-backs” from localities, withholding tax revenues to lessen the budget imbalance in Sacramento.
Much of the country, I know, views California as a negative role model because of its dysfunctional politics and fiscal paralysis, but it should have another reputation, as a state where there has been a great deal of grassroots civic innovation in spite of or, perhaps because of the dysfunction.
I noticed this several years ago when I was working on a research project for Philanthropy for Active Civic Engagement (PACE), a report on local government’s role in promoting civic engagement. One of the problems I faced was finding sufficient numbers of examples in other parts of the country to counter-balance the usual amount of civic innovation I was finding in West Coast, especially the Golden State.
I remember doing a briefing for the PACE board of directors in San Francisco. From where I stool in North Beach, I could drive twenty miles in any direction but west and find a striking example of local government innovation. But it wasn’t just Northern California. It was Chula Vista, Los Angeles, Ventura and Pasadena.
The journalist Carey McWilliams once called California the “Great Exception,” but he could just as easily have called it the “Great Experiment.”
In recent years, Brea, California, a city of 40,000 in northern Orange County, has become a case study in innovative fiscal management. Facing declining revenues and a big deficit, the city’s public managers rejected the top-down approach, opting instead to start a process allowing city employees to come up with ideas for restructuring the budget.
In the spring of 2008, an e-mail went out to all the city’s employees explaining the dire economic conditions facing the city. About 75 employees show up to a participatory budget meeting to develop solutions for the city’s fiscal crisis. The organizers had developed a collaborative process for the meetings. The participants were given a set of open ended questions and asked to meet in small groups to come up with answers.
Each of the groups recording their findings on flip charts and presented them to the larger group. Finally, a consensus would be developed in the larger group and the participants would move on to the next question. Brea city staffers call this the “problem solving model.” No ideas are rejected out of hand.
The next step was to hold two community-wide meetings. About 100 people participated in these meetings, not a bad turnout for a city the size of Brea to discuss priorities and community values to be considered when budget cutting.
The volunteer employee group developed tiered lists of reductions for each city department and used those lists to develop a balanced budget that was then submitted to the council. In all about 50 meetings were held during a ten month period with the average employee attendance of about 30-40.
The end result was a balanced budget elimination of 35 positions (though only about 11 of those resulted in actual layoffs or early retirements). The process was controversial at the time. Some council members reported were distrustful of it, concerned that the city manager had abdicated his responsibilities by giving power to the employees. Some citizens complained about city employees spending their time in endless meetings. The first year, the staff missed its budget deadline by three weeks, resulting in more complaints.
But in retrospect, most people see it as a success. The city has made some tough decisions and put itself in a better position to face the ongoing fiscal crisis with balanced budgets and less disruption than other California communities.
You can read about Brea’s experiment in collaborative budget making by linking here.
Mike McGrath is senior editor and chief information officer for the National Civic League. A former newspaper reporter and magazine writer, he is editor of the quarterly National Civic Review, which will be beginning its centennial year of publishing this spring.
Mike’s posts will appear every Thursday on the State of the Re:Union website.