On Tuesday night, activists and a City Council member will debate whether Cleveland should place the city’s pursestrings in residents’ hands.
The participatory budgeting charter amendment, which will appear on Cleveland ballots as Issue 38 in November, has become the latest battleground over how much power citizens should have inside City Hall.
Backers argue that democracy is served by giving residents a more direct say over millions in city spending. Opponents charge that participatory budgeting is a messy idea Cleveland can’t afford.
The two sides are colliding under a haze of uncertainty, as state lawmakers consider banning participatory budgeting before the November election. Another hearing on a proposed ban is scheduled for Tuesday, just hours before the debate.
The charter amendment would set aside the equivalent of 2% of Cleveland’s General Fund, or about $14 million, for a new People’s Budget Fund. Were Issue 38 to pass, residents would be able to vote on how to spend that money in a process overseen by an 11-member committee of mayoral and City Council appointees.
On the affirmative side of the debate are Jonathan Welle and Aleena Starks, two organizers with the People’s Budget Cleveland Campaign. Taking the negative side are Ward 13 Council Member Kris Harsh and Robyn Kaltenbach.
They’ll meet in person Tuesday at 6 p.m. in the Little Theater of Cleveland Public Auditorium.
Harsh and Welle spoke separately with Signal Cleveland over the last few weeks to lay out their cases.
Who should call the financial shots inside City Hall?
Issue 38 asks Cleveland voters to decide between two visions of city government.
The measure’s advocates say it will turn city spending power – currently held by City Council – over to the people. Welle described the amendment as “a chance to shake up the status quo and a chance to elevate the voice of the people with real power to make real decisions.”
Council members and union allies argue the amendment will wrest spending decisions away from the very people who were elected to make them – and who know how the city budget works.
In his interview, Harsh went on the attack. He labeled the Issue 38 campaign leaders the “wolves of woke street” – that is, interlopers who think they know what’s best for other Clevelanders but who actually put the budget in danger.
“They want to polarize against government,” Harsh said of the People’s Budget campaign. “They want to tell people, ‘Representative democracy is a failure. Representative democracy doesn’t work. You must come to us now.’”
Not so, according to Welle. He said the campaign doesn’t oppose city government, but instead wants City Hall to become more ambitious.
“We want to see a really robust public sector that is very effective at meeting people’s needs,” he said, adding, “This is the opposite of anti-government. This is strongly pro-government. Can’t believe I have to say that.”
Can Cleveland afford the People’s Budget?
Council is leading the campaign against Issue 38, with a major assist from the city’s labor unions. They argue that Cleveland’s tight budget doesn’t have money to spare.
This year, the city budgeted $711 million to the General Fund. About 73% of that spending pays for salaries and benefits for most city workers. The remaining $194 million covers such costs as materials, maintenance, utilities, contracts and paying down Cleveland’s debt.
Harsh pointed out that the city balanced the budget this year with only a small surplus of $197,000. Putting money in the People’s Budget Fund would require taking dollars from other departmental budget lines, he and other council members have argued.
“We don’t have $14 million to play with,” Harsh said. He added later, “I really need them to tell us where they think we should take the money from, though, because they’re leaving that in our hands and pretending like they’re not responsible for the decision.”
Take, for example, the fight earlier this year over an even smaller amount: Cleveland’s casino tax revenue, Harsh said.
Cleveland splits casino tax dollars between the General Fund and council discretionary funds. Some council members wanted to budget more casino dollars for projects in their wards – meaning less for city services. But Mayor Justin Bibb’s administration vigorously opposed the idea. The finance director argued it would rip a destabilizing $5 million hole in the General Fund budget.
Welle offered this response: If there’s a fear that city departments will lose money to the People’s Budget Fund, the committee could earmark dollars for those departments before presenting spending ideas to voters, he said.
That process isn’t spelled out in the charter amendment language. But Welle said the committee would have the autonomy to make those sorts of decisions.
“This is a permanent addition to the charter, and the committee needs to have the ability to use its creativity and wisdom, as it learns more through this process, to shape it,” Welle said. “So that’s one reason we didn’t spell things out in excruciating detail.”
Welle envisions a months-long process in which residents submit ideas and develop them alongside city officials such as the chief financial officer. Voters would be presented only with ideas that have been vetted, he said.
“The CFO needs to be part of that conversation, the budget director, the department directors, and so does the committee,” Welle said. “And they all need to be on the same page. I’m not saying that’s easy, but it’s feasible.”
Where will the money come from?
Welle maintains that the General Fund doesn’t have to be the only source of the $14 million. In his telling, about half of the dollars could come from Cleveland’s capital spending – in which the proceeds from bond sales finance brick-and-mortar projects such as parks and recreation centers.
Harsh strongly objects to this interpretation of the city budget. Tapping the General Fund is the only realistic way to seed the People’s Budget Fund, he said.
The city doesn’t borrow the same amount of money from bond investors each year, Harsh said. City officials decide how much to borrow based on the city’s capacity to take on new debt – and based on the maintenance needs of city facilities. The city also pays interest on its bond debt, meaning capital projects cost more over time than their sticker price, he said.
Plus, bonds aren’t a blank check. The city issues bonds for specific types of projects. This year, council approved the sale of $64 million in bonds, with money set aside for vehicles, roads and bridges, parks and other projects.
“We can’t tell the bond market, ‘Oh, we’re going to bond out $3 million and they’re going to figure out what it’s for later on,’” Harsh said.
Welle countered that the committee could ask voters to decide among capital projects that the city already wanted to finance.
“Many of the projects that residents are going to suggest, big capital projects, the city already knows need to get done,” Welle said. “It’s simply reprioritizing dollars.”
Ultimately, the amendment language does not identify a source for the People’s Budget Fund. It would be up to the mayor’s administration and City Council to decide where the money comes from.
What does the Mayor Justin Bibb’s Finance Department say?
Mayor Justin Bibb opposes Issue 38, though his administration will not have a seat in tonight’s debate.
In June, Finance Director Ahmed Abonamah told Cleveland.com that the charter amendment would “significantly impair” the city budget. With labor costs rising and revenue flat, the city doesn’t have much financial wiggle room, he said.
Since then, Bibb has left council to do the debating.
The mayor’s office declined to make the finance director available for an interview for this story. Press secretary Marie Zickefoose instead offered brief answers to questions about how Cleveland would pay for the People’s Budget.
Zickefoose said it was theoretically possible to use bond sale proceeds on participatory budgeting projects. But in practice it would be difficult, given restrictions on how the city can spend investors’ money, she said. She suggested that implementing Issue 38 would result in a hit to city services and staffing, too.
“It’s hard to imagine that that wouldn’t happen,” she said.
How will the voting work?
The charter amendment does not lay out a step-by-step voting process. It places the committee in charge of drawing up a way for residents, neighborhood by neighborhood, to decide on city spending.
Welle suggested the vote could go something like this: At the start of the year, residents propose spending ideas and volunteer to take them through a vetting process with City Hall. The committee whittles the list down and places items on ballots. Residents could cast votes in person at libraries, recreation centers and schools. They could also vote online.
The catch is that the Cuyahoga County Board of Elections would not run the vote. Instead, the committee would be in charge of administering the election, verifying residents’ identities and counting the ballots. That includes finding a way to involve kids as young as 13, who may not have any form of ID yet.
Welle said one possibility is for teens to vote through their schools, where names could be checked against enrollment lists. He defended the idea of extending the franchise to people so young.
“We want a host of 13-year-olds to have their first civic experience be voting on high-stakes decisions that actually matter,” he said. “That should be the expectation, that every resident in Cleveland learns civic life through that process.”
Welle argued that participatory budgeting will yield dividends at the regular ballot box, too. He cited one 2021 study of New York City’s program that concluded participants were 8.4% more likely to vote in an election.
But Harsh said he doubted whether the People’s Budget would really attract many residents. Look at Chicago’s Ward 49, he said, where the alderman puts $1 million in discretionary infrastructure dollars to a vote. Only 548 people voted in the most recent round of budgeting, equal to slightly less than 2% of the ward’s registered voters.
“I call it the privileged people’s budget,” Harsh said. “Only the people with the privilege of time can actually spend time on this.”
Harsh called the prospect of managing a new voter registration process a “bureaucratic cluster,” punctuating the phrase with a syllable we can’t print. In Harsh’s view, the People’s Budget will turn out to be a mess – one that council will have to clean up.
Asked about Harsh’s turn of phrase, Welle said other cities have found a way to run participatory budgeting programs. If the measure passes, Cleveland will phase the process in over a few years, giving the city time to work out the kinks, he said.
“It’s not to downplay the fact that this is a process that involves a lot of people and making high-stakes decisions,” Welle said, “and so we’re going to have to work hard to get it right.”