Capital Finance.

• Position: Brief Article

How Capital Budgeting Helped a Sick City: Thirty Years of Capital Improvement Planning in Cleveland

Hoffman, Susan; Krumholz, Norman; O'Brien, Kevin; and Geyer, Billie

Public Budgeting & Finance, Spring 2000, pp. 24-37.

This opinionated article presents a case study of capital improvement planning the City of Cleveland, Ohio. A systematic lack of capital planning led the city to default on its financial obligations in 1978. The heart of the problem was a chronic shortage of resources and the political nature of capital resource allocation-- city council members would trade visible capital improvement programs for votes. After the default, a new mayor was elected and the city began the long process of rebuilding not only its capital allocation program, but its budget, as well. The business community became involved in the capital program, and voters became more willing to support new taxes and fees in an effort to improve the city's deteriorating capital stock. The thrust of CIP changes surrounded 1)...