This blog was co-authored with Will Bernstein, Climate Advisor to the City of Pittsburgh.
Before flying to Glasgow last week to attend COP26, the UN climate conference, Pittsburgh Mayor Bill Peduto delivered his final budget to the city council. It was a fitting pairing of events, because Pittsburgh is making climate a priority in its city budget.
Factoring Climate Change Into City Equations
Cities are at the forefront of the climate crisis, and their budgets illustrate its impacts and its solutions. On one side of the ledger, they pay the price for climate change as increased flooding and landslides drain capital and operating resources. On the other side, budget choices once seen as mundane—what kinds of vehicles to buy, when and how to renovate buildings, how to purchase electricity—have meaningful climate impacts. That's why, with the support of the American Cities Climate Challenge, Pittsburgh is now crafting its budget with an eye toward addressing climate change.
“If you want to know what a city’s priorities are, look at how it spends its money.” That's a pretty good maxim for understanding local government. But that look is often easier said than done, even for the officials actually making budget decisions. That’s because city operating budgets usually consist of line items like “professional services” or “administrative expense” that explain narrowly how money is being spent, but tell us nothing about the actual outcomes being delivered to city residents.
So, what’s a city like Pittsburgh to do when it wants to better understand its budget for climate action? That's where a tool called “priorities-based budgeting" comes in.
Unlike the line item-focused budgets of the past, Pittsburgh’s budget is now centered around a defined set of values, with departmental operations defined in terms of outcome-based programs that are explicitly scored against those priorities. Starting in October of 2020, Pittsburgh began working with ResourceX to implement a priorities-based budgeting platform. Despite the challenge of COVID and remote work, ResourceX led a group of nearly 40 city staff (departmental leaders and administrators, budget office staff, and the Equity and Sustainability & Resilience offices) through a whirlwind process of programmatically defining every dollar of the city’s operating budget. Once defined, those programs were scored against the city’s climate and equity priorities.
Now the city could ask (and answer!) questions like, “how much money do we spend to benefit the climate?” or “what share of city operations are actively advancing our equity goals?”
Freeing Up Money to Meet the Goals
From this foundation, ResourceX then led the city through a series of budget workshops to identify ways to free up money in the budget, and to better support the climate and equity goals. These workshops gave departmental staff an opportunity to offer insights into how the budget could be improved, and they delivered. By the end of the workshops, the city had identified roughly $40 million in potential efficiencies, cost savings and new revenue, including a sustainable procurement policy geared toward reducing waste in city processes.
Finally, the city took this new framework and applied it to the development of the new 2022 budget. In the past, departmental budget requests would simply identify line items to increase or decrease. With the climate-focused budget, however, each request was tied to defined programmatic outcomes and detailed information on achieving the city’s climate goals. This allowed the Office of Management and Budget, in collaboration with the Sustainability and Resilience division of City Planning, to provide Mayor Peduto unprecedented insight into the city’s budget and its climate impacts.
A Budget That Assigns Value to Values
The budget that has resulted (pending approval by city council) already shows the benefit of the priorities-based approach, with funding allocated for new staff, training, and tools that will enable the city to better track and reduce its carbon footprint.
As Pittsburgh welcomes a new mayor, the city is on strong footing to continue its bold approach to climate action. It can also show other cities that budgets can be much more than an annual negotiation of organizational interests. Budgets are how cities truly express their priorities, and can be powerful tools for climate action. Transforming city budgets to address climate change will be essential to meeting our climate goals, and Pittsburgh has taken a first step. Many more cities should join, and put their money where their goals are.