This article examines decentralization in New York City by analyzing that city's recent experiences with community based budgeting. Specifically, using budgetary data from fiscal years 1982 through 1985, the research addresses the spatial a location of capital budget projects among New York's fifty‐nine community districts each of which is represented by a community board. Borrowing from the literature on intra‐city variations in the distribution of public services, we examine whether “success rates” in having local budget priorities accepted for inclusion in the city's capital budget are functions of the racial and/or economic characteristics of the community districts. Alternatively, borrowing from organizational theory, we address the same issue from the perspective of community boards' interorganizational relationships. The findings indicate that although each emphasis…social area and interorganizational…contributes independently to our understanding of spatial variations concerning local budget priorities, the latter is a more important factor than