MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Fatima Yousofi, senior officer, Infrastructure and Pensions, The Pew Charitable Trusts, said with drastic federal cuts, states will have to take a more active role in facilitating capital funding.

She said the continuity of major road, bridge, highway, water and other infrastructure projects hinges on states creating infrastructure banks, offering low-cost financing and bonding. 

She pointed to an example in Vermont where several rural communities created one large bond issuance. Teaming up created capacity and helped small communities share the administrative costs and bond reporting duties.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Josh Goodman, senior officer, State Fiscal Health, The Pew Charitable Trusts, noted the paradox that virtually all local governments are trying to create more affordable and attainable housing, but they are limited in funding it themselves through property taxes, because higher property taxes contribute to the high cost of housing.

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Josh Goodman, senior officer, State Fiscal Health, The Pew Charitable Trusts,  suggests that states loosen their grip on regulating what cities can do, so local government can be flexible to meet unique shifts in policy.

“If a state mandates small class sizes in schools, it can add billions of dollars in expenses for a huge city such as New York,” he said.

“Boston is highly dependent on property taxes, but they might not keep pace with inflation.

The state hasn’t given the cities the ability to levy income or sales taxes, so the cities are limited in how they fill [the budget] gap.”

MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Now that federal dollars are going away, a lot of state and local governments are experiencing more widespread deficits.

“Billions in healthcare research and university support have been cut, which means in cities like Boston or Pittsburgh built around hospitals, healthcare, higher ed and research, if those are areas that are hurting, your budget is hurting,” Josh Goodman, senior officer, State Fiscal Health, The Pew Charitable Trusts, said.

Also, as broad shifts in policy on immigration and documentation impact international travel, a city such as Las Vegas — somewhat dependent on international tourism — could 

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.