What is "Budgeting by Priority"?

Budgeting by priority is a budgeting methodology that many municipalities are turning to, including the City of Edmonds.

Rather than creating a year over year budget of line items in each department that increase or decrease, budgeting by priority (BP) employs an approach that aligns funding to programs and services based on input about the community's priorities. This allows the budget to meet the needs of the community and focuses on outcomes.

From the work of the Blue Ribbon Panel, they shared the following in a report titled "The Price of Government":

BP is a model that local governments and public sector agencies use to make budgetary decisions and allocate funds based on community needs. Traditional budgeting’s use-it-or-lose-it mentality and across-the-board budget cuts don’t consider factors other than a percentage make it difficult to connect funding with strategic goals or performance metrics.  Instead, priority-based budgets focus on aligning resources with community priorities and outcomes. Here’s how it works:

Community Needs: Priority-based budgeting starts by identifying the most critical community needs based on Citizen led surveys and focus groups. These needs can include areas like housing, transportation, sanitation, education, and healthcare.

Program-Centric Approach: Instead of allocating funds based on departmental structures, priority-based budgets allocate funding to specific programs or services. This approach ensures that resources directly address community needs rather than being tied to historical spending patterns.

Accountability and Transparency: Priority-based budgets emphasize accountability for program results. By linking funding to outcomes, local governments create transparency and a better understanding of the true cost of each program. Residents gain confidence in government spending, and leadership remains accountable.

Flexible Funding: Rather than applying across-the-board cuts, priority-based budgets adjust funding based on the value of individual programs. Programs aligned with community priorities receive continued support, while those less effective may see reduced funding.

Mike Bailey, lead of the Blue Ribbon Panel, published this article in 2015 that explains budgeting by priority in depth and how it was implemented in the City of Redmond.