People’s Budgets: A Brief History

NEIGHBORHOOD POLITICS-There has been a lot of talk about the People’s Budget Los Angeles in these past few months, but Angelenos might be interested to learn that the concept dates back over 110 years. 

In 1909, Lloyd George, England’s Chancellor of the Exchequer (Minister in charge of the Treasury aka the dude in charge of the money), and a young Winston Churchill proposed a series of unprecedented taxes on the lands and incomes of the wealthy to fund social programs for the poor. A Churchill biographer called it revolutionary for being the first budget in British history with the expressed intent of redistributing wealth equally across all classes in England. 

To my knowledge, this is the first explicit English use of the phrase “People’s Budget” but there have been many riffs on the concept, both before and since, where people both inside and outside of government have tried using the budget to improve that government’s value system and frame the future. 

Franklin Delano Roosevelt said in his 1944 State of the Union speech, better known as the Second or Economic Bill of Rights: “We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence.” 

Martin Luther King took up the cause with his campaign for economic rights which would have guaranteed a job for all who wanted to work and a guaranteed income for those not able to work. 

Bernie Sanders said: “An economy and a government based on justice, means racial justice and the end of systemic racism in this country which goes well beyond police brutality and murder. It goes to every aspect of our lives.” 

In 1991, the Congressional Progressive Caucus was established by Maxine Waters and Ron Dellums of California, Bernie Sanders and three other Democrats, and is now the third largest ideological caucus in Congress. 

They were initially concerned about the weak response by Democrats to the recession of the 1990s, and were the first group to propose a comprehensive legislative alternative to the Newt Gingrich-led Republican “Contract with America” which vowed to shrink government, lower taxes, pursue tough-on-crime legislation, and reform social services by slashing the number of people receiving government assistance. 

In 2011, the Congressional Progressive Caucus released their first People’s Budget which attempted to align the Federal budget with what people across the country were demanding: ending wars, creating good American jobs, and reducing the disparities between the ultra-rich and the 99%. 

They did this by taking the income of the Federal government and reprioritizing spending in a financially sound manner so as to benefit the American people, including reducing the deficit. 

This and subsequent People’s Budgets used a fiscal approach to support reforms that would enshrine universal access to affordable, high quality healthcare, expand educational opportunities, rebuild our infrastructure, invest in our communities, re-establish collective bargaining  rights, replace a minimum wage with a living wage, remove privacy violations enshrined in the Patriot Act, reaffirm commitment to international treaties, focus on diplomacy, pursue “fair trade” not “free trade” agreements, crack down on corporate influence and campaign finance laws, and protect Social Security benefits. 

The executive summary of the Fiscal Year 2019 Congressional Progressive Caucus’s People’s Budget is available here.  The full budget is available here.  

Traditionally, the “fiscally responsible” approach has been to reduce regulation and slash taxes for corporations to stimulate job creation, and slash funding for social programs to make up for the loss of Federal income. 

Instead, the People’s Budget took hundreds of billions from unsustainable wars and corporate welfare (including massive subsidies and tax breaks for the oil and coal industries at a time when global warming was becoming a frightening reality) to pay for programs that would lift every American into the middle class, modernize the country’s infrastructure and lead the attack on climate change. 

The People’s Budget addresses the reality that the American economy suffers from an absence of demand due to extreme inequality and the hollowing out of the middle class. 

Corporations will never create jobs unless, and until, there is a market for their products. And, without incentives in place to keep them in the United States, those jobs will be created overseas. 

A government’s budget is more than just allocating income and expense. In selecting what our tax dollars are spent on, which expenses to prioritize, it becomes a declaration of its (and our) values. 

The foundational principle of a People’s Budget is simple: citizens deserve more of a voice in how their money is spent, and budgeting should reflect community needs and priorities. 

With increasingly overt racism on display across the country, from the gutting of the Voting Rights Act to the violence perpetrated on the Standing Rock protesters, from the Flint water crisis to the murders of Breonna Taylor and George Floyd, more and more activists have increasingly questioned the amount of money allocated to police forces and whether there are better uses for the people’s tax dollars. 

In the 1980s and prior to the People’s Budget of the Congressional Progressive Caucus, another approach to citizen budgeting which became known as participatory budgeting was being developed in Porto Alegre, Brazil. 

At a time of rapid expansion and in response to demands by longtime residents for more equitable services, the city granted citizen groups a certain percentage of the municipal budget with the right to deliberate and vote on how those monies were spent. 

Versions of the process were subsequently adopted by more than 2,700 governments around the world, including Chicago in 2009 where the people of the 49th Ward -- one of our country’s most economically and racially diverse communities -- were given the right to vote on funds for infrastructure projects. Everything from sidewalk repairs to public murals. 

Four years later, in the summer of 2013, the Black Lives Matter movement arose in the wake of the mishandling of the murder of Trayvon Martin. 

With the People’s Budget of the Congressional Progressive Caucus as an example at the national level, social justice advocates aligned with elements of one or both groups to start developing local versions of the same. 

With the pandemic disproportionately affecting communities of color, Black Lives Matter Los Angeles was working with other Black leaders and organizations across the county in early April to develop a response to the interlocking economic, political, and social injustices of ongoing structural racism, in part by redirecting money from police departments’ budgets to fund community investments. 

On April 20, Mayor Garcetti released his Fiscal Year 2020-21 budget which cut money from infrastructure and city services, but increased funding for the LAPD. 

In response, Black Lives Matter and other groups developed a survey to determine how Angelenos wanted their tax dollars spent. The People’s Budget Los Angeles was developed from 24,426 survey responses and from 3,300 participants who engaged in a participatory budgeting process on May 24, 2020. 

The People’s Budget LA calls for 46% of the City's General Fund to be spent on Universal Aid and Crisis Management (child and youth development, economic assistance, emergency preparedness, environmental justice, food and housing security, public health and healthcare), 28% on Built Environment (fire department, libraries, parks and recreation, public transportation and public works), 25% on Reimagined Community Safety (community care workers, community investment, neighborhood empowerment, mental health and wellness and restorative justice), and less than 2% on traditional law enforcement and policing. 

Their website went live in late May, and there was a special presentation to the Los Angeles City Council on June 15, 2020. 

The foregoing is the first of a number of papers from the People’s Budget Los Angeles Committee of the 2020-21 Neighborhood Council Budget Advocates addressing issues and concerns about the People’s Budget Los Angeles.


(Liz Amsden is a member of the Budget Advocates, an elected, all volunteer, independent advisory body charged with making constructive recommendations to the Mayor and the City Council regarding the Budget, and to City Departments on ways to improve their operations, and with obtaining input, updating and educating all Angelenos on the City’s fiscal management.) Prepped for CityWatch by Linda Abrams.