MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Josh Goodman, senior officer, State Fiscal Health, The Pew Charitable Trusts, authored a study that looked at the largest cities in the nation and found 20 of 25 have budget deficits in fiscal year 2026 and many have deficits that go beyond that.

“I was a little bit surprised in doing this analysis.

It’s not just a remote work and office vacancy problem; it is that they got a lot of help from federal stimulus and infrastructure dollars.

Plus, post Covid, they got income tax and local taxing boost,” he said.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

It’s certainly time for local governments to think outside the box,” Lucy Dadayan, a principal research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, said.

“Local governments could ... enact tourism taxes. Government buildings and land could lease space to cell towers or solar farms.”

Dadayan said there is an upfront cost, but many cities have lowered costs while raising revenues via automation.

She said a great example is a meter for coins at every parking space — which cost a lot to maintain and service — replaced with an app that makes it easy for people to pay by phone.

DOWNTOWN MIAMI MOBILITY IS A LIVING HELL

FOR PEOPLE WITH DISABILITIES AND OTHERS

 WHO FACE CONSTANT  BARRIERS

For more than a decade, downtown Miami has been a living hell for people with disabilities.

Dozens of sidewalks are illegally closed for construction for 3+ years.

Existing sidewalks are often narrow and rarely accessible.

This photo depicts a completely destroyed/too narrow sidewalk has festered for years.

It is an incredible danger to people with mobility/vision disabilities.

It connects to the nearby Brightline transit station.

This segment of NW 6 St. just east of NW. 1st Ave. must be fixed.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Maria McHale, governmental affairs and policy director for East Tennessee REALTORS® (ETNR), said REALTORS® have a responsibility to understand the complex financing choices that local governments face and to help ensure those choices are made with balance and long-term vision in mind.

“Local elected officials work hard to balance growth and resident services, and beneficial development is often hindered by a lack of infrastructure funding,” McHale said.

“As REALTORS® advocate for smart growth, we can help educate communities on sustainable ways to fund and improve neighborhood infrastructure without putting an unfair financial burden on homeowners.”

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Business Improvement Districts (BIDS) are self-taxing districts where property owners fund supplemental services and improvements (cleanliness, security, marketing) and all revenues are reinvested locally.

New Local Revenue Strategies: Cities can boost funds by raising service fees, levying special assessments, and monetizing their assets — such as through congestion charges, stormwater taxes, utility fees, asset leasing, naming rights, or selling land development rights.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

In addition to drawing from hopefully healthy rainy-day funds, Lucy Dadayan, a principal research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, offered these best practices for raising municipal revenue without directly raising property tax millage:

Public-Private Partnerships (PPPs) are increasingly used to finance, build and operate major infrastructure projects. The private sector provides upfront capital and assumes cost overrun risks in return for future revenue.

Community Redevelopment Agencies (CRAs) fund local revitalization by capturing and reinvesting increased property tax revenues within designated zones, particularly in underserved areas.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Lucy Dadayan, a principal research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, offers these standard belt-tightening measures:

• Hiring freezes/not filling vacant positions, suspending or reducing pay increases, furloughs and layoffs.

• Delaying or canceling infrastructure upgrades.

• Across-the-board or targeted spending cuts in both non-essential and sometimes critical services.

• Selling surplus assets or utilizing government-owned real estate for revenue generation.

• Redirecting already-obligated funds to ensure that legally committed projects can proceed.