As state and local governments prepare for an extended period of fiscal constraint, there may be a temptation to narrow decisionmaking processes. To move quickly in response to national policy changes, local leaders may compress timelines, limiting public input.

It’s an understandable instinct, of course. But consolidating executive authority is misguided — and counterproductive.

The same civic engagement infrastructure that helped governments allocate historic federal investments in recent years is also the key to navigating tough trade-offs ahead. Community engagement, too often dismissed as aspirational or discretionary, is essential in this moment. Wielded right, it’s a powerful tool for prioritization, accountability and impact.

A new fiscal landscape

As a result of the American Rescue Plan Act, Bipartisan Infrastructure Law, and Inflation Reduction Act, state and local governments had access to unprecedented levels of federal funding. Encouraged by federal guidance, many governments used this opportunity to test new models of engagement: participatory planning, cross-sector advisory groups, multilingual consultations and more.

As those funding streams recede, governments face a fundamentally different landscape. Budgets are tightening. Revenue growth is slowing. New demands continue to emerge. The question now is not how to fund everything, but how to make equitable, transparent, and evidence-informed choices about what to sustain — and what to phase out. In that context, effective community engagement is a mechanism for smarter governance.

The value of engagement in budget decision-making

Effective public engagement elevates priorities that traditional performance metrics may overlook. Residents’ feedback can spotlight high-trust, high-impact programs — such as energy efficiency upgrades, job training pathways or mental health supports — that deliver value not always captured in dashboards.

Engagement also surfaces gaps. Community members’ lived experience helps identify barriers to access, structural inequities and unintended consequences that top-down planning may miss.

Most importantly, authentic engagement builds legitimacy. When residents understand the limitations and have been part of the policy or budgetary process, they are more likely to understand the rationale behind difficult decisions.

And in cases where raising revenue is the only option to maintain essential services, robust engagement can build support for any resulting new taxes or fees.

Strategies for high-quality, sustainable engagement

Build trust through transparency and accountability. Building trust requires more than simply sharing information. It demands a consistent commitment to open dialogue and visible accountability. Governments must actively communicate fiscal constraints, timelines and opportunities for input in ways that are clear, accessible and proactive. This builds public confidence and reinforces that engagement is not just performative, but influential.

For example, Sarasota, Florida, and Louisville, Kentucky, modeled this strategy during their climate action planning processes, maintaining publicly-accessible documentation and regularly-updated meeting materials. Morganton, West Virginia, offers an example of a smaller city that prioritized transparency in its ARPA-funded State and Local Fiscal Recovery Funds. The city made a variety of websites, surveys, forums and outreach materials. These efforts allowed residents to follow the planning process closely and contribute with greater clarity and confidence.

Center the most impacted communities. Those most vulnerable to funding shifts — whether due to income, geography, race or other factors — are often the least likely to be heard in traditional policymaking. Centering these communities requires governments to remove barriers to participation and to proactively design processes around equity. When done well, this approach ensures that decisions reflect the needs of those most affected and mitigates the risk of deepening disparities.

For example, with its State and Local Fiscal Recovery Funds investments, Asheville, North Carolina, created a Community Engagement Leadership Academy to empower community members to organize around budget issues. It also created an equity and engagement committee within its city council to enact policies to strengthen the inclusion of groups historically left out of the decision-making process.

Collaborate through inclusive partnerships. Public agencies benefit significantly when they work alongside trusted community partners. These organizations are often better positioned to convene stakeholders, translate policy into plain language, and create culturally resonant engagement spaces. Tucson, Arizona, and Tampa Bay, Florida, implemented this model by forming nonprofit networks that co-led climate resilience planning and sustained public participation beyond early project phases.

Elsewhere, cities like Chicago and Austin have used State and Local Fiscal Recovery Funds investments to institutionalize inclusive advisory bodies that share decision-making power. These models elevate community leadership and help ensure that funding decisions are grounded in local realities.

Sustain and evolve engagement over time. To be most successful, engagement must be treated as a sustained civic infrastructure, not a short-term project. Governments that embed ongoing engagement structures are better equipped to adapt to new challenges, track community priorities, and maintain public trust.

Richmond, Virginia, created a permanent climate resilience task force informed by community input and equity data, while Community Change Grant recipients have implemented multiyear strategies that include resident advisory councils and quarterly assemblies. These models create continuity, responsiveness and legitimacy over time.

Real-world applications in climate and housing

These strategies are already yielding results in critical policy domains. In St. Petersburg, Florida, the Storm Squad is a joint partnership among Pinellas County government, the University of South Florida, and community groups to strengthen connections between policy decisionmakers and community members around climate resilience and preparedness. They hold monthly meetings, host town halls, and train residents to use a GIS system to surface needs and insights for the county’s emergency management agency. The opportunity to apply for the Community Change Grant under the IRA expanded their strategies around community engagement.

In housing, Minneapolis used deep engagement to build support for zoning reforms that eliminated single-family-only restrictions, enabling denser and more affordable housing options. In Durham, North Carolina, officials distributed engagement toolkits and conducted neighborhood-based consultations to co-create zoning updates.

In Cairo, Georgia, a city of about 10,000 residents, Councilwoman Annette Higdon aligned housing funding with community engagement and capacity-building — offering financial literacy training and homeownership workshops to ensure residents could fully benefit from new development.

Moving forward

Engagement is not a cure-all. But it is a proven way to align decisions with public values, minimize harm to vulnerable communities and protect the integrity of democratic governance.

As fiscal conditions grow more challenging and people’s wariness of the public sector grows, governments must resist the urge to pull back from engagement. Instead, they should deepen it.

Prioritize the voices of those most affected. Partner with those who know the community best and build durable systems that turn participation into policy. In doing so, local governments can earn public trust that will facilitate the best possible outcomes in response to the challenging budgetary decisions that lay ahead.

This post was originally published on Next City.