MUNICIPAL FINANCE CHALLENGES

AND POTENTIAL SOLUTIONS

Michael Pagano, dean emeritus, University of Illinois at Chicago College of Urban Planning and Public Affairs and former Brookings Metro non-resident fellow, has researched public finance for decades. 

He said federal funding typically accounts for only about five percent of a municipal operating budget, so federal cuts won’t hurt deeply.

The area that will see a drastic change is capital spending.

“With the surge of infrastructure and stimulus money, cities have been designing a city future that had federal support for electric charging stations, expansion of infrastructure and repairing old infrastructure,” Pagano said.

“This is especially true in older northern states that are not experiencing the demographic gains that southern states are.

The loss of federal dollars forces them to lower their expectations of what the future will be.”