Maria Barakat

Program Manager for Transformative Racial Equity

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How any entity determines its budget reflects the values and priorities of the decision-makers behind it. In California, decisions on where and how to spend public dollars are among the most consequential choices government employees and representatives make. That’s because public money touches every aspect of our lives, from the roads we cycle on to get to work to the schools our children attend, and beyond. 

But California’s current budget frameworks have often perpetuated inequities, reflecting the racialized American context they stem from. As a result, resources are neither equitably distributed nor accessed, and the positive impacts of public investments and resources are unequally felt. At the same time, the racial wealth gap, driven by historic and present systemic racism has created a deeply uneven economic playing field—one in which Black and Brown communities face higher barriers to health, wealth, and climate resilience. So, how can government officials close these gaps and address widespread racial inequity across the state? Doing so requires new approaches to how our government develops its state budget.

What Are Budget Equity Tools?

Budget equity tools, or BETs, are tools that address systemic racism and inequities in government spending. BETs ensure resources are fairly distributed through a racial equity and reparations lens. Using a multi-faceted data analysis framework that includes dollar amounts  and holistic people- and environment-centric information inputs, BETs prioritize budget allocations that benefit communities most impacted by disinvestment, exclusion, and discrimination, offering a formal structure for achieving equitable outcomes for all.

On May 9th, 2024, the California Racial Equity Commission will hold its Budget Equity Subcommittee’s first public meeting. Racial Equity Commissioners Candis Bowles, John Kim, Gabriel Maldonado, and Jolie Onodera will share plans and host a panel discussion for developing a California Budget Equity Tool which will be part of the Statewide Racial Equity Framework the Commission is mandated to produce. The REC was established in 2022 out of Executive Order N-16-22 to begin the state’s formal racial equity work (see Embedding Racial Equity in the Fabric of California’s Government). The framework will be a guide for all state government entities to adopt and implement in order to fulfill their mandates to embed racial equity into their functions, processes and outcomes.

Why BETs Matter

Before effectively putting BETs into practice, it’s important to understand why we need them. At its core, racial equity is about fairness, justice, and belonging—making systems work for all people and the environment equitably. In practice, racial equity centers communities most negatively harmed by government policies and roots present and future solutions in addressing the cause of inequity: racism and discrimination. An equitable budget doesn’t mean equal funding for everyone; instead, it ensures fair outcomes for all. Given the inequity that has existed in our society for generations, this approach is more efficient and effective at meeting the needs of all Californians. This means greater investments must flow to places or groups that have the greatest need—those that have been systematically marginalized and disadvantaged by existing budget systems. This rejects zero-sum policymaking and white supremacy culture baked into current structures by adding nuance to decision-making criteria and weighting equity more heavily with the understanding that everyone benefits from a budget that drives a more equitable and just society.

Steps Towards Equity

While many California state leaders and staff care deeply about racial equity, most still lack infrastructure and effective training and tools for understanding and applying racial equity in government processes. For example, while over 500 state employees have completed the Capitol Collaborative on Racial Equity’s cohort training, roughly 240,000 staff have not used this resource. In addition, thousands of staff do not have training on the racialized histories and contexts of California state policies and legal landscape that shape inequities. As a result, they don’t know why and how California’s communities and geographies are racialized today. 

Currently in California there are several interventions that seek to address equity in budgeting. The first is the updated state Budget Change Proposal process. The BCP is the form all departments must fill out to change the level of service or funding sources for activities authorized by the legislature, or to propose new program activities not currently authorized. The California Department of Finance recently embedded six equity-related questions in its BCP in response to the Governor’s Executive Order. The new questions ask state department budget staff to assess equity, historic baseline systems, and projected impacts on different communities. 

This is a positive step, but more needs to be done earlier in the process. First and foremost, the equity-related questions must be required; the approval of a BCP must be dependent on department staff answering them with robust equity analyses. In addition, the equity-related questions do not come with clear instructions, orientation, and definitions of key terms like “inequities.” The BCP doesn’t provide data resources that can provide reliable, current, racially disaggregated data to budget staff to set accurate equity baselines or make projections and measurements of equity outcomes. Without racial equity expertise and training, state budget sand Department of Finance staff do not have the necessary tools to ensure the effective use of these questions and racial equity impact measurement. 

Before a budget reaches the BCP phase, it goes through multiple layers of prioritization and assessment in state departments and agencies as it travels up to the legislature. These early phases are an opportunity to enact structures that prioritize racial equity and reparations. Yet, there are currently no standards or requirements for state employees or legislators to have racial equity expertise nor mechanisms in place to track and ensure that public resources are reaching all Californians equitably, making it challenging to ensure equitable outcomes are being achieved.

Other important state level equity interventions include House Resolution 39 and Senate Concurrent Resolution 136. Respectively, these resolutions recommend the state Assembly and Senate to adopt “equity impact assessments” to analyze policies that come before these bodies. These recommendations to the California Legislature are a momentous first step in engaging policymakers and providing structures for them to assess the potential harms and benefits of policy on racialized and marginalized communities. However, the bills must do more to increase effectiveness such as requiring equity impact analyses and making approval and bill passage dependent on them. They must provide racial equity training and definitions, set standards and criteria, and develop standardized tools and review and feedback processes. 

In sum, California is well positioned to lead with racial equity, it just needs to keep going. 

How We Move Forward

At the state level, agency and department staff and leadership lack sufficient training and tools for evolving their overall practice from within government to remedy our racially unequal reality. Without normalizing equity and operationalizing mandatory frameworks across the enterprise, the state will not be able to affect racially equitable outcomes in its daily operations. 

Using BETs effectively requires establishing a culture of equity within government agencies and departments. Essential steps to achieve this include: 

  • State agencies and department staff must have racial equity competency–through training and practice–and understand how government decisions, policies, and budget allocations impact racial equity outcomes. 
  • Government entities must adopt and implement racial equity frameworks and tools, train staff how to understand and analyze racial equity, and normalize these tools into agency, department, and office culture—equity must become a core value and mission
  • These entities must collaborate with fiscal offices and their analysts to engage meaningfully in racial equity budgeting, develop appropriate measurement tools for defining equity impacts, establish an evolved budget and management culture, create prioritization for racial equity policy and heavily weight racial equity as a policy criteria.

In addition to establishing a culture of equity within government, key practices for successful implementation of BETs include: 

  • State government must establish permanent, fully resourced infrastructure with the capacity and authority to develop and implement BETs–including racial equity budget tools, conducting internal operations and external policy, program and project racial equity analyses, making policy recommendations, and providing ongoing, iterative, comprehensive technical assistance and training.
  • The BET should be a stand-alone tool that includes racial equity learning and orientation, process instructions and expectations, and structured review processes.
  • Agencies and departments should be required to integrate racial equity into budget proposals, and prioritize equity throughout the state budget process.
  • The Department of Finance fiscal staff should work with racial equity practitioners to analyze budget proposals for equity, and consistently enforce equity requirements through a robust, transparent feedback process.
  • Agencies and departments must align budget proposals with the California Racial Equity Commission’s standards for racial equity.

Above all, it is essential to approach BETs as one component of a comprehensive effort to achieve racial equity. That means creating a robust tool that targets root causes of inequity, accurately measures current and future needs based on equity-focused, and directly incorporates community input. It requires interagency and departmental collaboration as well as leadership buy-in to achieve consistency and cohesion, as well as addressing knowledge gaps among tool users and analysts. The success of budget proposals should be linked to their equity impacts, incentivizing thorough measurement of equity outcomes. 

Until now, decisions about budget allocation and investment have overlooked the members of society who are most in need due to systemic neglect and exclusion. Prioritizing equity in budgeting should be central to California’s budget process and state functions, serving as a key driver for government transformation. By establishing new priorities and methods, California can foster equitable systems that benefit everyone—especially those that have been historically left behind. 

Maria Barakat

Program Manager for Transformative Racial Equity

Read Bio