The Questions We Should be Asking is a new series by RCC founding principal Andrew Salkin that examines the most pressing issues facing cities today by taking a closer look at how city priorities are reflected in budgets. This first edition looks at return on investment and transparency in police budgets and asks what could be achieved if some of those resources were diverted elsewhere. In part two of the series we’ll look at public transportation, why it loses so much money and whether or not it should be free.

Part I: Police Budgets

Show me the money — What’s your ROI?

Return on Investment — a topic not often associated with the ongoing conversations that have swept the nation around defunding local police departments. Like many others I have wondered if sinking more money into current police programs is truly returning the service we seek — safer communities.

To answer these questions, I first took a look at police budgets as a percentage of total municipal budgets in eight cities (see chart below). If the old adage about putting your money where your mouth is holds true, we can view budgets as statements of values and intent. So, if we want to know what’s important to a city and its police department, the budget is a good place to start. Admittedly, this is a back-of-the-envelope analysis; some budgets cover 2019–20; others 2020–21, so sums will change as we go forward. But I wanted to get some context on the question. Here’s what I found:

• City leaders generally value their law enforcers: across the country they make up between 11% (Boston) and 23% (Louisville) of municipal budgets. Or about one in every four to ten of our city tax dollars.
• However, the portion of municipal funds used to police the streets varies widely and can add up to more than half a total police budget — suggesting different cities place different values on feet on the street. For example, in Louisville, Kentucky, dollars spent on patrolling are just 46% of the total while most of the balance of the city’s total police spend of $191 million is made up by administrative (21%) and support (33%)

The differences across jurisdictions make sense. After all, Louisville’s law enforcement needs may be quite different from, say, Chicago’s, where a bigger police presence on the South Side might make a palpable difference in fostering a sense of safety while cutting crime levels. But one could have said the same about Minneapolis, right?

And — the caveat here is that police budgets aren’t often broken out even though they should be, and maybe they will be soon enough. So, the percentage of personnel and associated costs for those patrolling vs. administrative is not clear. This also means understanding a particular precinct- or community-level budget is almost impossible.

Most cities break out wages, salaries and overtime costs in a category known as ‘Personnel Services’ (PS) — which five of the eight cities I analyzed do. Another catch-all category is ‘Other than Personnel Services’ (OTPS) which broadly covers the spend on supplies and equipment. The same five cities also break this out. Still, three don’t. Another thing to note is that this number does not include dollars for police pensions, or legal fees and costly payouts from lawsuits. They sit in other agencies making it again more difficult to understand the true cost of policing.

But shouldn’t they be broken out so we know the total figure? For example, New York City police pensions added up to around $5 billion in FY 2020 and the city makes regular contributions to this account. Additionally, about $230 million was plowed into NYPD legal fees in the 2018 financial year for settlements and judgements. So the operational or administrative fees associated with each officer in other cities that don’t break this out are likely much higher than can be revealed in a cursory analysis of the police budget. But for now, we’ll use these numbers.

Finally, apples-to-apples comparisons of administrative, patrolling or support costs in police departments in one city versus those of their peers in other major metropolitan areas aren’t easy because most of them don’t break out administrative (Louisville and Denver do), patrolling (Louisville and Boston do) or support costs (just Louisville).

This had me asking — if nonprofits — another type of organization meant to serve the public — are required (or encouraged) by their funders to disclose the portion of their funds used for overhead, why shouldn’t those assigned to protect us do the same? Particularly since they take as much as one quarter of total city funds? As federally pushed police reform picks up steam, shouldn’t the metrics to measure a police department’s effectiveness be consistent and transparent? If we are serious about shifting dollars from police departments elsewhere isn’t a logical starting point knowing the breakdown of budgets?

Moving on — what do we get for those dollars? And in this politically charged, pandemically challenged world, what else is possible?

To answer that question, I next did a cursory analysis of what, say, 2% of these funds might buy if shifted into social programs funded by the same city. Again, this is neither art nor science. Just a ballpark guess.

Sticking with a city for which I worked and thus know well, in New York City, for example, United Neighborhood Houses manages about 40 social programs that serve 765,000 New Yorkers across the city. The budgets for these projects range from a few million to $30 million dollars. Publicly available budgets show that a $120M diversion from the NYPD’s $6 billion budget, for example, can cover nearly all the city’s summer youth jobs program. Employing 75,000, the city’s youth jobs program was the largest of its kind in the nation until was recently cancelled because of COVID-19. Kickstarting the program would get at-risk kids off the streets and put them on a different path. That is an investment with sound future economic and social potential.

And New York wouldn’t have to look hard to find that money. The city’s financial comptroller has already proposed a hiring freeze for the NYPD which, when combined with the savings from an estimated 3% attrition rate (and associated fringe costs), would likely free up more than $250 million per year. Roughly double the budget of New York’s valuable summer jobs program.

As we all collaborate to build back better and more equitably, I wonder have you thought about this too? What have you found? How can we call for greater transparency and demand an understanding of ROI in police budgeting? Let’s go beyond the protests, channel our anger and anguish — and move past the theory of defunding the police and towards action that will help our communities. Let’s dig into the numbers to see what might materially change with a slight shift of dollars. Now is the moment. We can create the change we need.

Andrew Salkin is a Founding Principal at Resilient Cities Catalyst, leading RCC’s work connecting cities and the private sector to spur innovation and financing to ensure resilient initiatives actually happen. Andrew has over 25 years of experience working in and with cities. He is an urban innovator who specializes in inspiring city officials to proactively transform business as usual to achieve higher impact and more resilience outcomes. He is an expert in leveraging available budgets, public administration, and governance to drive transformation.