On Chicago's far north side, citizens are taking democracy into their own hands. Through the first "participatory budgeting" experiment in the United States, residents of Chicago's 49th Ward have spent the past year deciding how to spend $1.3 million in taxpayer dollars. Over 1,600 community members stepped up to decide on improvements for their neighborhoods, showing how participatory budgeting can pave the way for a new kind of grassroots democracy, in Chicago and beyond.

Chicago may seem an unlikely site for participatory democracy, given the city's famous patronage system and lack of transparency in public finances. Faced with this system, community groups end up competing for budgetary scraps—an exhausting struggle. But frustration with backroom dealing is in part what makes Chicago and the United States ready for new ways of managing public money.

In 2007, Alderman Joe Moore discovered an alternative at a US Social Forum session on participatory budgeting. There, he learned about Porto Alegre, Brazil, where since 1990 tens of thousands of people have been directly deciding how to spend as much as 20 percent of their city's annual budget. Moore also learned how participatory budgeting has gone global, spreading to over 1,200 cities around the world and winning the United Nations' recognition as a best practice of democratic governance.

The 49th Ward, home to over 60,000 people and the neighborhood of Rogers Park, is known for its diversity and vibrant community life. Over 80 languages are spoken within less than two square miles. Independent-minded citizens have often put intense pressure on local officials. Concerned that Moore wasn't responding to ward needs, they nearly voted him out of office in the last election. So how does one of the nation's most diverse neighborhoods bring opinionated residents together to make difficult budget decisions?

Moore started by setting aside his $1.3 million "menu money," the discretionary budget that each alderman receives for capital infrastructure projects. In April 2009, with guidance from The Participatory Budgeting Project, Moore invited leaders of all the ward's community organizations and institutions to form a Steering Committee, which decided the timeline and structure of the process.

At a series of neighborhood assemblies starting in November, residents brainstormed initial spending ideas and self-selected community representatives who would transform those ideas into concrete proposals. These representatives, along with Steering Committee mentors, split into six thematic committees. They then spent four months meeting with experts, conducting research, and developing budget proposals.

The Public Safety Committee, for instance, received many requests for security cameras. To learn more, they visited the neighborhood’s 24-hour camera viewing center. As community representative Marilou Kessler explained, "everyone [on the committee] came—about 15-16 people on a workday. It was astonishing cooperation." The trip shifted the committee's priorities: They learned that the cameras are used only occasionally, mostly by specialty police teams, and are not continuously monitored. After police explained that lighting is more effective at deterring crime, the committee replaced several camera proposals with street light proposals.

At first, some skeptics worried about what residents would propose. Would they rush through inappropriate projects, or focus just on their personal needs? Not quite. To identify sidewalks most in need of repair, Transportation Committee members walked almost every block of the ward, in the middle of the Chicago winter. "I will never look at sidewalks the same way again!" reflected Dena Al-Khatib, one of the sidewalk inspectors. Community representatives also learned to move beyond their initial assumptions and priorities. As Laurent Pernot of the Transportation Committee said, "At the community meetings everyone was complaining about their block... But now every single committee has taken stewardship of the whole ward as their mission."

After months of work and more neighborhood assemblies, the community representatives presented a ballot of 36 specific budget proposals, and then helped organize a publicity campaign. The Arts and Other Committee put together an artistic exhibition of proposals at Mess Hall, a local cultural center. Andy De La Rosa, an artist on the committee, found himself swayed by the proposals from other committees. "This is all extra," he said of his committee's proposals for murals, artistic bike racks, and historical markers. "I hope people vote for the streets."

On April 10th, all ward residents age 16 and over, regardless of voter registration or citizenship status, were invited to vote on the proposals at a local high school. In the week beforehand, 428 residents voted early at the Alderman’s office—more early voters per day than during the 2008 presidential election. On the final voting day, a stream of people filled the school cafeteria, reading over proposals, consulting with community representatives, and voting for up to eight projects on paper ballots.

In the end, 1,652 residents turned out, not to elect someone to decide for them, but to make their own decisions about the ward. The turnout vastly exceeded expectations, considering the brand-new process, lack of media coverage, and absence of any other elections or ballot measures to inspire turnout.

The $1.3 million was enough to fund the 14 most popular projects. The proposal to fix sidewalks received the most votes, and other funded projects included bike lanes, community gardens, murals, traffic signals, and street lighting. Every committee had at least one proposal funded.

But participatory budgeting in Chicago still has a long way to go. Like at most community meetings in the ward, turnout did not reflect the full diversity of residents. In most participatory budgeting processes, disadvantaged communities turn out in droves, but not yet in the 49th Ward. Despite additional Spanish-language assemblies, materials, and outreach, Latino turnout was particularly low. According to Latino leaders, this was due largely to general distrust of government and worries about immigration status. Some community organizers added that there was too little time for one-on-one meetings with such leaders early on, and that the infrastructure funding did not speak to the concerns of many low-income residents. Had turnout been more diverse, would funding have been allocated differently?

Organizers will have a chance to find out, since Moore has already committed to continuing participatory budgeting. As he wrote in a letter to constituents, it "exceeded even my wildest dreams. It was more than an election. It was a community celebration and an affirmation that people will participate in the civic affairs of their community if given real power to make real decisions." Community representatives are already debating how to deepen community engagement by building on the outreach from this year.

Important as it is, the ward's $1.3 million discretionary budget is just the beginning. Residents are now discussing how to bring participatory budgeting to other budgets, and some reformers in other wards are already considering running on a participatory budgeting platform in the next municipal elections. This energy shows the power of truly democratic experiences, and opens up new possibilities for democracy in Chicago and beyond.