ST. LOUIS, MO – September 12, 2026 (STL.News) Americans often think about elections in terms of political parties, personalities, social issues, and campaign promises.
Another consequence may ultimately affect taxpayers more directly.
Money.
The people voters elect decide how governments spend billions—and collectively trillions—of dollars. They approve budgets, borrowing, taxes, employee compensation, pension contributions, infrastructure spending and reserve policies. They determine whether temporary revenue supports temporary expenses or becomes the foundation for permanent government programs.
Those decisions accumulate.
A growing collection of recent financial reports from municipalities, counties, and states across the United States suggests many governments are confronting the consequences.
In the past 30 days alone, governments from California to New York have reported structural deficits, depleted reserves, borrowing requirements, proposed tax increases, employee furloughs, layoffs, service reductions, and warnings that recurring revenues are failing to keep pace with recurring expenses.
The important point is not that every American government is financially distressed.
They aren’t.
Some municipalities balance their budgets, maintain healthy reserves and have little or no debt.
That makes the comparison even more important.
Fiscal distress is not inevitable.
Government leadership, budgeting practices, long-term planning and financial discipline can make an enormous difference.
A problem appearing across the country
The evidence is no longer confined to one troubled city.
On Aug. 17, The Texas Tribune examined financial conditions in four of Texas’ largest cities and found all four facing substantial budget pressure at the same time.
Dallas faced a roughly $51 million budget gap.
Fort Worth faced about a $94 million gap.
San Antonio projected a $158 million deficit over two years.
Austin faced a structural deficit that could exceed $100 million by the beginning of the next decade.
Dallas was considering more than 100 employee layoffs and reduced library hours. Fort Worth was examining vacant-position eliminations and reductions in planned civilian employee raises. San Antonio and Austin were considering higher property taxes while cutting or restructuring services.
Perhaps most striking was Dallas City Manager Kimberly Bizor Tolbert’s description of the situation:
The fiscal pressure, she said, could represent the city’s “new normal going forward.”
The Texas Tribune’s reporting alone should get taxpayers’ attention because the financial problems are affecting several major cities at once, not a single government facing an isolated emergency.
Read The Texas Tribune investigation
Chicago faces another enormous deficit
Chicago is again confronting a major budget gap.
A budget forecast released by Mayor Brandon Johnson’s administration projects an approximately $882.4 million shortfall for fiscal 2027.
That is actually an improvement from the city’s approximately $1.15 billion fiscal 2026 deficit, but it remains an extraordinary amount of money.
Chicago officials have not ruled out additional tax measures as they work to address pension obligations and other recurring expenditures.
The city has also turned to debt refinancing as part of its immediate financial strategy.
In August, WBEZ reported that Chicago planned to refinance as much as $525 million of debt, producing near-term savings to help address an approximately $85 million hole remaining in the current budget.
Read WTTW’s Chicago budget report
Read WBEZ on Chicago’s debt refinancing
National City warns of possible insolvency
One of the most severe recent warnings comes from National City, California.
The municipality faces an approximately $12.7 million General Fund deficit, and its city manager warned that continued spending at current levels could lead to insolvency by 2030.
NBC 7 San Diego reported Aug. 16 that city leaders were considering spending reductions and new revenue as reserves decline.
Investigative newsroom inewsource went further, reporting that National City could face state intervention if the situation deteriorates sufficiently.
Services potentially threatened include parks, libraries, swimming facilities, and nutrition programs, with public safety eventually exposed if the financial deterioration continues.
Read NBC 7’s National City report
Read the inewsource investigation
That is no longer an abstract debate over accounting.
A municipality warning that it could become unable to meet its financial obligations within several years represents a direct warning to taxpayers.
Albany may have to borrow to operate
Albany, New York, offers another dramatic example.
A recent midyear report projected approximately $55.5 million in cumulative deficits over about 16 months, including an estimated $22.18 million shortfall during the remainder of 2026 and $33.3 million in 2027.
Rising healthcare expenses, retirement costs, debt, and revenue assumptions were cited among the pressures.
The city has already implemented a hiring freeze and could require further spending cuts.
Reporting surrounding Albany’s financial condition has also raised the possibility that borrowing could eventually be required to cover payroll and other ordinary obligations.
That is an important distinction.
Borrowing for a bridge expected to serve residents for 50 years can be sensible public finance.
Borrowing because ordinary revenues cannot cover ordinary government operations warns of something fundamentally different.
Read the Times Union report on Albany
Jersey City inherited a $254.8 million gap
Jersey City, New Jersey, may be one of the clearest examples of how a structural fiscal problem develops over time.
The city’s own 2026 interim budget report says the current administration inherited a $254.8 million structural budget deficit, roughly one-quarter of the municipal budget.
According to Jersey City’s report, between 2019 and 2025 the government relied on approximately $667 million of one-time revenue, including reserve withdrawals, public-land sales and borrowing.
The city also entered 2026 with approximately $52 million in unpaid healthcare claims.
The report describes a government that repeatedly used nonrecurring resources to support expenditures that continued year after year.
Read Jersey City’s interim budget report
That sequence deserves attention because it is a textbook illustration of a structural deficit.
Reserves can be spent once.
A parcel of public property can be sold once.
Borrowed money must eventually be repaid.
But salaries, healthcare, public safety and other recurring government expenses return every year.
Harris County raises taxes amid fifth shortfall
The fiscal strain is not limited to city governments.
Harris County, Texas, approved what the Houston Chronicle described as its highest property-tax rate in modern history while confronting an approximately $180 million budget deficit.
The newspaper reported that this represents the fifth consecutive year of budget shortfalls.
Rising law-enforcement compensation, healthcare expenses and court-appointed attorney costs are among the major pressures.
Read the Houston Chronicle report
Five consecutive shortfalls are particularly significant.
A one-year deficit can result from an economic shock.
Repeated deficits raise a different question:
Is the government’s underlying spending structure sustainable?
Bexar County is spending down reserves
Nearby Bexar County, Texas, faces its own problem.
The county faces a projected $145 million deficit through 2028.
Its proposed solution avoids an immediate tax increase partly by drawing approximately $68 million from reserves.
Those reserves are expected to decline from roughly $303 million to $234 million.
It is the second consecutive year that the county is relying on savings to balance its budget.
Read the San Antonio Express-News analysis
Using reserves during an emergency is precisely why reserves exist.
Using reserves repeatedly to cover a recurring imbalance is different because the savings account eventually shrinks.
New Orleans warns of more budget pain
New Orleans is also confronting continued financial pressure.
Axios reported Sept. 11 that city officials expect additional budget cuts and financial “pain” in 2027 after relying heavily on one-time funding this year.
Earlier reporting showed the city postponing infrastructure projects amid a roughly $35 million spending reduction.
The city has used furloughs, reduced programs and borrowing while attempting to maintain operations during its fiscal crisis.
Read Axios on New Orleans’ 2027 budget
Read Axios on delayed New Orleans projects
Again, the consequences move beyond accounting.
Infrastructure gets postponed.
Employees are furloughed.
Programs are reduced.
The financial statement eventually becomes a quality-of-life issue.
Grand Junction reports a structural deficit
Grand Junction, Colorado, reported an approximately $6 million structural deficit heading into its 2027 budget process.
Recurring expenses are growing faster than recurring revenues.
Cited pressures include debt service, fire-service costs, rising labor expenses, and unfunded state mandates.
Read The Business Times report
The dollar amount is far smaller than Chicago’s.
The underlying accounting problem is similar.
Sacramento County remains structurally unbalanced
Sacramento County, California, provides another example.
During its Sept. 8 budget proceedings, the county reported approximately $1.011 billion in discretionary spending against $970 million in ongoing discretionary revenue.
In other words, recurring spending exceeds recurring revenue.
County materials characterize the condition as an ongoing structural deficit.
Review Sacramento County’s Sept. 8 budget meeting information
The county also reported nondedicated reserves substantially below its policy target.
Thurston County considers layoffs and service cuts
In Washington state, Thurston County is considering how to reduce spending by approximately $5.5 million in 2027.
Proposals presented to county commissioners included layoffs, service reductions, cost transfers, and elimination of certain services.
The county is attempting to manage an estimated $22.3 million deficit through 2029.
Reporting describes the underlying issue as a persistent structural deficit in the county’s General Fund.
Read the Thurston County budget report
Snohomish County says governments are facing similar pressure
Snohomish County Executive Dave Somers made an observation that is particularly relevant to the national picture.
In presenting his recommended 2027-28 budget, Somers described the cycle as one of the most difficult he has encountered because of inflation, restricted revenue options, and a long-standing structural deficit.
He then said Snohomish County was not alone.
Cities, counties and the state, he said, were facing similar pressures.
Read the Snohomish County budget commentary
That observation closely matches what the national reporting is showing.
Santa Barbara depleted much of its reserves
Santa Barbara, California, offers another variation.
The city has technically adopted a balanced FY2027 budget.
But that doesn’t tell the whole story.
Recent reporting says Santa Barbara has drained much of its savings, leaving reserves at roughly 12% of operating expenditures, considerably below its approximately 25% target.
City officials are now discussing how to rebuild those reserves.
The city’s budget announcement acknowledges that its General Fund is balanced while emphasizing the need for continued fiscal discipline and rebuilding depleted reserves.
Read the Santa Barbara News-Press report
That is precisely why taxpayers should look beyond the words balanced budget.
A budget can be technically balanced after reserves have been consumed.
Fullerton began with a $13.7 million deficit
Fullerton, California, began its recent budget process with a projected $13.7 million General Fund deficit.
Officials reduced the deficit through proposed cuts, revenue changes and one-time measures before adopting the final spending plan.
The debate included service reductions, vacant positions and reserve use.
Read the Fullerton Observer report
Colusa taps special funds
Even much smaller municipalities are encountering similar circumstances.
Colusa, California, adopted its FY2026-27 budget with an approximately $495,552 General Fund shortfall.
Officials planned to use money from special funds to close the gap after reducing the original shortfall through spending cuts.
Officials acknowledged that further reductions could require personnel decisions.
Read the Colusa County Pioneer Review report
The amount sounds tiny compared with Chicago.
For a small municipality, however, the underlying problem is just as real.
Lehigh County proposes a 17.7% tax increase
In Pennsylvania, Lehigh County’s executive proposed a 17.7% property-tax increase while attempting to address a structural deficit and protect county reserves.
The county’s 2026 budget projects expenditures exceeding revenue by roughly $3.7 million, and officials warn the gap could widen.
Read Lehigh Valley Public Media’s report
This illustrates another predictable outcome of prolonged fiscal imbalance.
Eventually, government generally has only a limited menu:
- Cut spending.
- Reduce services.
- Reduce employees.
- Spend reserves.
- Sell assets.
- Borrow.
- Increase taxes or fees.
Or use some combination of all of them.
California illustrates the state-level problem
Municipal governments aren’t alone.
California’s nonpartisan Legislative Analyst’s Office has repeatedly warned about the state’s structural financial condition.
Its analysis of the 2026-27 budget found that California is relying heavily on reserve withdrawals and borrowing to achieve budget balance.
The LAO estimated approximately $20 billion in reserve withdrawals and suspended deposits, along with about $4 billion in borrowing, despite unusually strong tax revenues.
The office concluded that California’s structural budget problem had arrived.
Read the California Legislative Analyst’s analysis
State officials and independent analysts can disagree about the exact definition or timing of a deficit. That is why independent fiscal analysis is important.
New Jersey has been working down a structural deficit
New Jersey provides a useful example of both the problem and an effort to address it.
The state entered its recent budget cycle confronting an approximately $3 billion structural deficit, according to the New Jersey Department of the Treasury.
Officials subsequently reduced that imbalance substantially while maintaining reserves and making the state’s required pension contribution.
The Treasury explicitly noted that part of the current financial burden stems from decisions accumulated over decades, including previous pension underfunding by administrations of both parties.
More recently, New Jersey received a credit-rating upgrade after reducing the structural deficit further and maintaining an approximately $6 billion surplus.
Read New Jersey Treasury’s fiscal analysis
That is an important example because governments can improve.
Fiscal deterioration does not have to become permanent.
State fiscal cushions are shrinking
The broader state picture also deserves attention.
The Pew Charitable Trusts reported Sept. 3 that the extraordinary state-budget surpluses produced during and after the pandemic have been shrinking as exceptional federal assistance and unusually strong revenue collections fade.
The 50-state median fiscal balance declined for the second consecutive year in the latest comparable data.
The National Conference of State Legislatures now maintains an entire State Budget Shortfall Database tracking state spending reductions and revenue increases tied to fiscal-year 2026 budget problems.
Read Pew’s analysis of shrinking state surpluses
Explore NCSL’s State Budget Shortfall Database
That makes it difficult to dismiss the municipal examples as unrelated anecdotes.
Washington has the same problem at the federal level
The financial pressures extend all the way to Washington.
The federal government recorded a fiscal-year deficit of approximately $1.97 trillion through August 2026, according to Treasury figures reported by Reuters.
That already exceeds the entire $1.775 trillion deficit recorded during fiscal 2025, with one month still remaining in the current fiscal year.
Read Reuters’ federal deficit report
That means fiscal pressure can now be observed at virtually every level:
Federal government.
States.
Counties.
Municipalities.
And ultimately, the people expected to finance all of them are largely the same taxpayers.
Not every municipality is struggling
This point is essential.
- There are financially healthier municipalities.
- Some maintain balanced recurring operations.
- Some carry very little debt.
- Some maintain significant reserves.
- Some have operated debt-free for extended periods.
Their existence matters because it demonstrates that chronic fiscal instability is not simply an unavoidable feature of American government.
Cities face different economic conditions, demographics, and inherited obligations, so direct comparisons require care.
But leadership still matters.
Elected officials establish priorities.
They approve budgets.
They authorize debt.
They decide whether to preserve reserves or spend them.
They decide whether to maintain infrastructure today or pass it to tomorrow’s taxpayers.
And they decide whether recurring programs are supported by recurring revenue.
St. Louis belongs in the discussion but isn’t the entire story
St. Louis offers a useful historical example without needing to be the article’s target.
The city reached 856,796 residents in 1950 and today has fewer than 300,000.
It has experienced approximately seven decades of enormous population loss.
St. Louis has also had Democratic mayors continuously since 1949.
Those are verifiable historical facts.
It would be inaccurate to claim political control alone caused every element of St. Louis’ decline. Suburbanization, deindustrialization, regional fragmentation, transportation changes, and numerous other forces played important roles.
But seven decades of continuous political leadership also cannot reasonably be removed from a discussion about seven decades of municipal performance.
Successive mayors and Boards of Aldermen made decisions involving taxes, public safety, infrastructure, development, borrowing and municipal spending.
Those decisions matter.
The same standard should apply to Republican administrations, Democratic administrations and nonpartisan municipal governments throughout the country.
This shouldn’t be a partisan exercise.
It should be an accountability exercise.
Elections determine who manages the money
The collection of current financial stories offers voters a bigger lesson.
When someone votes for a mayor, county executive, council member, alderman, governor, legislator, member of Congress or president, that voter is helping decide who will manage public finances.
Campaign rhetoric disappears quickly.
Debt does not.
A poorly structured pension remains.
Deferred maintenance remains.
A neglected water system remains.
A depleted reserve account remains depleted.
And a government employee compensation package approved today can remain a taxpayer obligation for decades.
Conversely, responsible decisions compound.
Reserves accumulate.
Debt declines.
Credit ratings improve.
Borrowing costs decline.
Infrastructure gets replaced before catastrophic failure.
A government becomes better prepared for recessions and emergencies.
Taxpayers should ask harder questions
Perhaps voters should spend less time evaluating political advertisements and more time examining government financial statements.
Before supporting an incumbent or challenger, voters can ask:
Does recurring revenue cover recurring spending?
Are reserves growing or shrinking?
How much debt does the government owe?
Why is it borrowing?
Are pension liabilities being adequately funded?
Is infrastructure being maintained?
Are officials using one-time revenues for permanent expenditures?
Are taxes rising simply to maintain existing service levels?
Is population growing or shrinking?
Is the tax base expanding or contracting?
What happened financially during the current officials’ terms?
Those are measurable questions.
The evidence points to a broader warning
- Dallas.
- Fort Worth.
- San Antonio.
- Austin.
- Chicago.
- Albany.
- Jersey City.
- National City.
- Harris County.
- Bexar County.
- Sacramento County.
- Thurston County.
- Snohomish County.
- New Orleans.
- Grand Junction.
- Santa Barbara.
- Fullerton.
- Colusa.
- Lehigh County.
These governments have different populations, economic structures, and political leadership.
Yet recent reporting repeatedly uses the same language:
- Deficit.
- Structural deficit.
- Reserve depletion.
- Borrowing.
- Tax increases.
- Furloughs.
- Layoffs.
- Service reductions.
- Insolvency risk.
That doesn’t prove every American municipality is in financial trouble.
It does demonstrate that municipal and state fiscal stress is occurring broadly enough across the country to deserve much more attention.
And it demonstrates something else.
The financial condition of government is not merely an accounting issue.
It is the accumulated result of thousands of decisions about what government promises, what it spends, how it pays for those promises, and how far into the future officials are willing to push today’s bills.
Those decisions are made by people.
And those people are generally elected.
Who voters put in charge matters.
Because ultimately, elections have financial consequences.
