1:01pm | Editor’s note: This is a commentary based on information provided by, as well as the opinions of, Long Beach-based resource allocation expert Pat Lynch Ph.D.
Government agencies, including police departments and fire departments, are scrambling to balance their budgets, which in most cases means making hard choices about resource allocation. One strategy that some public sector leaders are using is called “proportional sharing,” which means all departments and agencies must cut their budgets by the same percentage amount.
Sounds fair, doesn’t it?
One Long Beach city councilwoman was quoted as recently saying, “I do believe in proportional sharing in terms of budget cuts, but cuts and it is a meaningful approach to managing quality of life in this city.”
She couldn’t be more wrong about ways to control government spending, said Pat Lynch Ph.D., president of Business Alignment Strategies Inc., which helps clients optimize their business results by aligning people, programs and processes with organizational goals.
“In fact, proportional sharing is notfair, and it is an ineffective resource allocation strategy,” said Lynch, who works with both private and pubic sector clients. “It’s time to put to rest the myth that proportional sharing is fair and effective, and to demand that public sector leaders make the tough decisions they were elected or hired to make. We simply don’t have the luxury to do otherwise.”>
Lynch has much experience working with public entities and agencies at the state, county and local levels, including Cal State Long Beach, the Los Angeles County Department of Public Works, the Orange County Transportation Authority, the Los Angeles Fire Department and Long Beach Unified School District.
Here are three reasons why government budget cuts based on proportional sharing are ineffective, according to Lynch, who has consulted with the Los Angeles Fire Department and many other government agencies:
1. It doesn’t consider the appropriateness of the budget before the cuts were made. That is, some departments or agencies may have been over-funded, others may have been under-funded and some may have been funded appropriately. Now the errors are more pronounced.
2. It treats all services as equally important, i.e., there is no attempt to prioritize them. In reality, there are services that are critical to government agencies’ ability to achieve their missions: those that are very important, those that are important and those that don’t have anything to do with the mission.
3. It gives the public a false sense of security that their leaders, such as mayors, city managers and council members, are taking a close look at what is being done and why, so they can make informed and effective resource allocation decisions. In reality, proportional sharing doesn’t do anything of the sort. By requiring across-the-board cuts, decision makers simply are supporting the status quo, but at a lower level. This way they don’t have to justify any changes, which voters may not like.
Why do city, county and state leaders favor proportional sharing when addressing resource allocation?
Lynch said it could be because they do not realize such a strategy is ineffective and unfair. Or it also could be that they realize proportional sharing allows them to shirk their duty of making tough decisions while appearing to be taking actions that are in the best interest of the citizens involved.
She has several suggestions as to what decision-makers should be doing instead of relying on proportional sharing:
1. Take the opportunity presented by the challenging economic environment to question how they are allocating resources, why they are doing so, how those allocations are supporting the agency’s mission, and whether there are more effective ways to use the resources.
2. Prioritize the services provided by determining the impact they have on the agency’s mission. The three categories Lynch uses are critical services, very important services and important services
3. Decide what the resource allocation should be among the three categories.Assess the risks by considering alternatives to the status quo.
4. Assess the risk by considering alternatives to the status quo.
5. Ensure the decision-making process is transparent and fair. Stakeholders often accept decisions, even those they don’t like or agree with, if they believe the decision-making process was fair.
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