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Making the Most of Far Too Little

How small underfunded local governments can overcome the odds

Local governments in small towns and rural areas often face big challenges such as shrinking economies, dwindling local job opportunities, limited access to healthcare, and much more. These communities face complex issues that even the largest, wealthiest metros struggle to address. For small municipalities, disinvestment, small tax bases, and smaller government budgets can make solutions feel out of reach. Small local governments must do more with less--with underfunded budgets and fewer employees. Lack of attention and support from state and regional partners can further exacerbate these challenges. Still, with smart planning and prioritization, local governments can tackle big problems and operate efficiently and effectively despite small budgets. Below are some strategies for small local governments to consider as they work to maximize their impact.

1. Focus on the basics: Small local governments should focus on delivering high quality, high impact services. Target limited resources toward the most critical service areas such as water and sewer service, trash pick up, fire and emergency response, and transportation. Executing these basics with excellence will ensure the community’s essential needs are taken care of and can increase trust in the government’s efficacy. A proven track record of effectiveness and high levels of community trust may also help a municipality secure essential partnerships and funding opportunities down the line.

2. Collaborate with neighboring governments: Small, local governments cannot afford to duplicate services. City leaders should consider how collaborating with neighboring or overlapping jurisdictions could reduce costs and increase efficiency. For example, small cities and towns should work closely and proactively with county governments. Neighboring towns in rural areas may also be able to share essential services or personnel, reducing costs for everyone. Pooling services has been done in many states, including New Jersey, which had great success with the practice after the Great Recession.

3. Consider outsourcing non-core functions: Small local governments can outsource non-core functions to private companies or nonprofit organizations with more subject matter expertise and access to outside funding sources. For example, utility companies can directly administer bill forgiveness programs, or government grant recipients could be contracted to provide 211 services. This must be done cautiously as privatization of public services can create significant equity and transparency concerns if not done with care. Still, for small governments, it may not be feasible to have full-time engineers, social workers, surveyors, or other staff on the payroll. Collaborating and contracting with nonprofits or local businesses could allow for greater efficiency and effectiveness in service delivery.

4. Invest in government employees: Small local governments do not have access to the large talent pools of bigger metros and often struggle to attract and retain high quality staff members. Local leaders should focus on investing in city employees and creating attractive work environments. Invest in professional development and training. Empower experienced employees to take ownership of their work and find innovative solutions to problems. A government is only as effective as its employees, and in small governments, each employee can have a big impact on their community.

5. Think critically about technology use: Technology can be a powerful tool for local governments to streamline operations and reduce costs. Online platforms can be used to communicate with residents, automate administrative tasks, and more. At the same time, paying for multiple private technology services can get expensive quickly. Before investing in a new technology product, seriously consider whether the time savings will justify the costs. For administrative tasks, reduced admin burdens often do justify the price of technology solutions. Tech and social media can also streamline municipal communications with residents, and social media is typically free to use. Municipal governments have often used technology to increase efficiency in the following.

Administrative Tasks

  1. Time Tracking & Payroll Management

  2. Project Management

  3. Collecting Customer Data & Feedback

  4. Expense Management

  5. Budget Tracking & Management


  1. Sharing emergency alerts and safety information to residents in real time

  2. Advertising and publicizing government events and activities

  3. Communicating construction updates or infrastructure upgrades

  4. Soliciting community feedback on proposed government projects or community needs

6. Engage with local residents: Smaller municipalities have a unique opportunity to engage large proportions of their residents in the process of governing. Fewer residents and smaller neighborhoods can make community engagement more manageable and meaningful. Work to genuinely engage the community in decision-making processes and seek their input on important issues. Consider using modern experiments with direct democracy, such as participatory budgeting, to foster connections between local residents and their government.

Small towns and cities rarely have the tax base of larger municipalities, but local leaders can still deliver high quality, impactful public services to their communities. By thinking creatively, working collaboratively, and engaging residents, small municipalities can learn to deliver big results with fewer resources.


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