Getting Back on Track: What To Do When the Local Budget Feels out of Control
Elected officials across North America are grappling with budget shortfalls and financial uncertainty. Despite holding budget hearings and reviewing financial reports, many still feel they lack control over their city’s financial future. The numbers don’t always reflect their priorities, while unexpected economic shifts make long-term stability feel impossible.
A recent discussion in Pasadena, California, highlights this struggle. Councilmember Rick Cole called for a deeper review of the city's financial reports, noting alarming trends. "Last year, Pasadena's expenses increased by 13.8% but revenues rose by just .6%. Obviously that is unsustainable."
Like many cities, Pasadena faces pension liabilities, rising costs, mounting unfunded capital needs and the growing expense of maintaining aging infrastructure. Cole urged his colleagues to take a strategic approach, emphasizing that financial literacy among elected officials is critical: "Most people understand words matter and elections matter, but underestimate how much numbers matter."
This situation is not unique to Pasadena. Local leaders are being asked to approve budgets that don’t align with reality. They are expected to maintain services, fund infrastructure and balance pension obligations while revenues remain stagnant. Many cities are reacting by taking on more debt or deferring maintenance, but neither approach provides long-term improvement.
The Strong Towns approach offers a better way. Instead of chasing one-time revenue infusions or hoping for outside funding, cities need to focus on financially resilient development patterns. That means prioritizing projects that generate stable, long-term revenue and taking a hard look at liabilities that will strain future budgets.
Cities must also reconsider how they account for long-term obligations, ensuring that financial reports fully reflect the promises made on infrastructure, pensions and services. Local officials need to be financially literate enough to ask probing questions and challenge assumptions. That way, they can make informed decisions about their community’s future.
If you’re an elected official struggling with budget uncertainty, now is the time to take a proactive approach. Take the Strong Towns 101 course to learn how to build a financially strong community. Read "Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity" to understand why so many cities face insolvency — and what you can do to change course.