Doing less with less: Coping with federal cutbacks and fiscal uncertainty

Given the backdrop of dramatic cuts to the federal budget, fiscal uncertainty has become the norm for many state and local governments. 

With shrinking revenues, rising costs, and growing public demands, leaders are no longer being asked to “do more with less,” an operative term that has been used for the past 10 years — until now. Government leaders are starting to say something unheard of — “do less with less.” 

This stems from ideological shifts that question certain government services offered and to whom. More generally, the current questioning regarding the appropriate role of government also requires rethinking priorities, operations and expectations. How can governments uphold their responsibilities to the public while navigating prolonged financial strain? 

The obvious answer to the current political climate is embracing strategic austerity, modernizing operations and building resilience into every layer of government.

A New Reality: From “More with Less” to “Less with Less”

Despite budget cuts, the mantra of doing more with less suggests that governments can become more efficient and innovative. But current conditions — post-pandemic economic shifts, inflation, federal funding cliffs, and labor shortages — have changed the equation. 

Essential services are being stretched, and optional programs are disappearing. Many leaders now face hard choices about what not to do. Adding to this growing dilemma, citizens are often split between some wanting more services while others argue that the government needs to shrink many services they see little need for. Adding to the discussion is the fact that many who have cheered for federal program and budget cuts failed to recognize the impact they would have on state and local government operations and services. 

There has always been a dynamic link. This new phase of fiscal realities requires honest communication with constituents and a recalibration of expectations.

Technology, once promoted as a prime cost-saving tool, now faces the time-tested reality that, despite its promoted efficiencies, it almost always comes with a higher price tag. Some believe emerging technologies like artificial intelligence applications and services can replace legacy equipment and reduce staff headcount. Generally, it is too early to tell if any shift to artificial intelligence will live up to its lofty promises.

Prioritization Over Expansion

Governments must distinguish between what is essential, what is nice to have, and what can no longer be sustained. Priority-based budgeting can help align spending with community values and strategic goals. 

Rather than across-the-board cuts, leaders should apply a scalpel, identifying programs that deliver high value and divesting from low-impact efforts. Transparent, data-informed decisions are key to maintaining public trust in tough times. AI can play a vital role in augmenting public decision-makers through data-informed models. However, such tools can be expensive and require experience and highly capable staff.

Embracing Technology as a Force Multiplier

While technology won’t solve fiscal challenges alone, it can help governments stretch limited resources. Automation, cloud services and digital self-service platforms can streamline operations, reduce manual workloads and improve service delivery. For example, chatbots can handle basic inquiries, freeing up staff for complex issues, while providing 24/7 service that would be too expensive to offer with staff alone. 

Likewise, AI and data analytics can support more intelligent decision-making and identify waste or inefficiencies. However, adoption must be strategic; tech should enhance, not overwhelm, already burdened teams. 

And we have learned from the recent federal experience that those who operate such technology need to be grounded in how government works instead of simply relying on keyword-hunting expeditions without context.

Workforce Realignment and Support

With many public-sector workers retiring and positions going unfilled, agencies must rethink their workforce models. This may include reskilling current staff, reorganizing teams for agility and creating flexible or hybrid roles to attract talent. 

Coping with fewer staff requires a culture that encourages cross-functional collaboration and innovation. Investing in employee well-being and burnout prevention is not a luxury — it’s a necessity for sustaining government capacity.

Collaboration and Shared Services

Now is the time for governments to break silos and collaborate — across departments, jurisdictions and sectors. Shared services in IT, procurement, HR, or emergency response can reduce duplication and cut costs. 

Regional coalitions can help small or rural jurisdictions pool resources and achieve economies of scale. Partnerships with nonprofits, academia, and the private sector can also fill critical service gaps with tight budgets.

Leading with Realism and Resilience

Doing less with less should not be accepted as a defeat. Instead, view this difficult period as an opportunity to lead with clarity and purpose. Governments can navigate uncertainty by focusing on core missions, leveraging technology, supporting staff, and fostering collaboration while continuing to serve. 

This moment calls for bold, realistic leadership willing to communicate difficult choices openly. Fiscal uncertainty may be unavoidable, but how governments respond can lay the foundation for a more resilient future.

Dr. Alan R. Shark is the former Executive Director of the Public Technology Institute (PTI), is an Associate Professor at the Schar School of Policy and Government, George Mason University, where he also serves as a faculty member at the Center for Advancing Human-Machine Partnership (CAHMP). Shark is a National Academy of Public Administration Fellow and Co-Chair of the Standing Panel on Technology Leadership. Shark also hosts the bi-monthly podcast Sharkbytes.net.