Local governments are being asked to do more with less. It’s time we gave them better tools.
Vlatko Gasparic via Getty Images
COMMENTARY | As federal support for local government shrinks, localities can shift how they budget by doing what works first through evidence-based budgeting.
Between sweeping legislative shakeups like the One Big Beautiful Bill Act and waves of proposed budget and workforce cuts, the nation’s capital is sending an unmistakable signal to state and local governments: strong federal support is coming to an end.
In fact, a new report from the National Association of Counties estimates that this new bill and proposed cuts will shift at least $1 trillion in funding requirements to local governments. But the demand for services from our cities and counties — healthcare, food assistance, affordable housing and community development – isn’t fading away. And many local leaders will soon find themselves having to do more with outdated tools, brittle budgets and little room to maneuver. The signal is clear: local governments will have to do more with less or residents will suffer.
Yet even as expectations grow, the tools local leaders have to meet those expectations remain woefully inadequate. Most cities or counties are left to navigate this landscape with fickle revenue streams, limited flexibility and outdated budgeting systems that often reward inertia over impact.
The recent federal shifts aren’t the only source of fiscal stress. Pandemic-era relief funding temporarily boosted local budgets, and the return to a new normal is difficult. Over the past two years, I’ve spoken with nearly 100 budget directors and finance leaders from counties and cities across the country as they grapple with how to sustain core services amid tightening budgets.
Over the past five weeks, I’ve worked closely with 13 counties — ranging from communities of just over 5,000 to those with populations over 3 million —as they begin to absorb the consequences of federal retrenchment. No matter their size or geography, the message is the same: traditional tools like across-the-board cuts, incremental budgeting and political guesswork aren’t enough to confront the double hit of rising need and shrinking resources.
These leaders aren’t resigned, they’re not walking away. They’re rolling up their sleeves and ready to do things differently. The good news? Better tools exist. The better news? We’ve seen them work. Local governments can shift how they budget — not by doing more with less, but by doing what works, first.
This approach is called evidence-based budgeting. It’s a straightforward idea: Make decisions about public dollars using data on what actually delivers results. But in practice, it requires rethinking how budgets are built — from how government documents define “evidence,” to how officials write templates, train departments and align funding with outcomes.
What I’ve seen from working with city and county leaders of both parties is that evidence-based budgeting is not only possible, it’s urgently necessary.
In King County, Washington, new investments in health and housing were monitored and adjusted based on results. In Philadelphia, budget proposals were scored on racial equity, feasibility and potential impact. In Chattanooga, Tennessee, transparency and community engagement allowed departments to propose shared solutions — and even reduce their own asks — because they understood how their work tied to broader goals like reducing youth violence.
But these are still the exceptions. Too often, performance takes a back seat to politics. Evidence is treated as an afterthought — if it’s considered at all.
This is especially dangerous now, as counties face fiscal cliffs from expiring federal relief funds, restrictive tax caps and inflation that outpaces local revenues. At the same time, they are absorbing more and more responsibility: funding shelters, maintaining infrastructure and delivering services once supported by higher levels of government.
And it’s not just about dollars. It’s about trust. Insider and financial language can make budgeting seem confusing and erode public confidence. Flat cuts demoralize departments and punish high performers. And when government leaders can’t answer basic questions about whether public investments are working, they lose the credibility needed to lead through crisis.
Local governments shouldn’t be asked to solve national problems with broken tools. They deserve budget systems that are clear, credible and focused on results. That means defining evidence rigorously, embedding it into budget instructions, training departments to use it and creating space for innovation where dollars and data can do the most good.
The leaders I’ve spoken with, and especially those I’ve worked with these past five weeks, aren’t content to do what’s always been done. They know budgets are moral documents. That every line item reflects a choice about who is served — and who is not. They want to make better choices. They want to fund what works.
If the federal government sends fewer dollars to cities and counties, local governments need every possible tool to spend those dollars more effectively and more tied to their residents’ needs. Evidence-based budgeting isn’t a silver bullet — but in a time of scarcity, it may be the most powerful tool we’ve got.