Chapel Hill to make cuts using priority budget

After experiencing its first deficit since 2006 last year, Chapel Hill is trying a new method to allocate its $51 million 2012-2013 budget — and officials say the system will give residents more say than ever before.

This is the first year the town will use priority budgeting, which adjusts department budgets individually rather than making uniform, across-the-board cuts.

“It forces you to make decisions on what services are most important to the public rather than try to cut things across the board in an incremental fashion,” said Ken Pennoyer, Chapel Hill’s director of business management.

As Chapel Hill Town Council decides what services it deems most important, residents have contributed through surveys and public hearings.

Pennoyer said they have participated more than in the past, partly because of resident involvement in Chapel Hill 2020. They will have another chance to join in April 30 at the next budget public forum.

Pennoyer said besides giving residents more input, priority budgeting makes sense in tough economic times.

“It’s a better decision-making process when you are in a time of scarce resources,” Pennoyer said.

But he said it is a much more difficult process than incremental budgeting because it is easier to make the same cuts to all services than to decide what is most important.

“The simple thing to do is try to apply the pain the same across the entire organization,” he said.

UNC School of Government faculty have recently brought “Budgetopolis” to Chapel Hill to help residents understand the process.

The budget simulation exercise is in the form of a board game that asks participants to make budget decisions in a variety of situations.

“I think it gives a real perspective of what the trade-offs are for communities that are making tough budget decisions,” said Lydian Altman, the director of the strategic public leadership initiative at the UNC School of Government.

It also allows participants to see the environment local government is operating under, she said.

“I think people who participated have a greater appreciation for the services the town provides and understand that funding is necessary,” said Chapel Hill Mayor Mark Kleinschmidt.

He said getting more community input on the budget will help the town to better meet the needs of the community.

But even with a change in budget procedure, he said resident concerns have not changed.

Kleinschmidt said there is no difference in public concern between fiscal year 2012-13 and past years, as many are still worried about service cuts and tax increases.

And Pennoyer said although those public concerns can sometimes be difficult to manage, it is beneficial to hear from many different perspectives.

“Everybody realizes that we still haven’t fully recovered from the economic downturn so we still have to make some difficult decisions,” he said. “There is also a sense of reality that we can’t have everything.”

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