Priority‐based budgeting: An honest broker among municipal functions?

Implemented in over 200 local governments, priority‐based budgeting (PBB) reflects a contemporary attempt to systematically determine and implement desired budgetary reallocation. PBB proponents claim it is highly effective in prioritizing governmental programs and aligning budgetary allocation to priorities. However, core municipal functions such as public safety and public works are often impervious to budgetary shocks. Can PBB overcome this to better align budgetary allocations with organizational priorities? This study examines 32 municipal PBB implementers with difference‐in‐differences analysis; finding a varied effect upon municipal functions that casts doubt on its ability to fully reallocate budgetary resources from low‐ to high‐priority programs. Applications for practice: Practitioners should be realistic in their expectations as they consider PBB implementation. PBB does not appear to create a sweeping reallocation from lower‐priority programs to higher ones and therefore requires a nuanced evaluation of its utility for a particular organization.PBB should be avoided by those seeking to reallocate dollars away from low‐priority public safety/public works programs or invest in high‐priority ones; instead local budgetary decisionmakers should rely on demographic and economic data to drive allocations within these departments.PBB can be quite effective in reallocating dollars toward administrative, developmental, and quality‐of‐life priorities or away from programs in those departments that do not align with organizational priorities.City managers and finance directors should avoid perpetuating any illusion that PBB treats all functions the same, as the study's finding are quite clear that it does not. [ABSTRACT FROM AUTHOR]