How Rethinking Budgeting Builds Trust, Agility, and Results

October 20, 2025 by Chris Fabian

With so many communities grappling with difficult budgets, I’m encouraged to see a groundswell of interest in new approaches ranging from strategy through to new technologies like artificial intelligence (AI).

Today, local governments must respond and adapt to an incredible amount of change — in priorities, levels of trust, financial conditions, and more. Agencies need a resource allocation mechanism that responds to change appropriately and efficiently directs resources where they are needed as fast as possible.

The Government Finance Officers Association’s (GFOA) Rethinking Budgeting Initiative calls for nimbleness, data-driven decision-making, feedback from all stakeholders (including residents), and clear performance measures. It also calls for using priority-based budgeting to connect these elements and build confidence in the adopted budget.

An Overview of Priority-Based Budgeting

Using priority-based budgeting, agencies begin by defining their priorities. What are the outcomes we want for the community we serve? Next, what are the programs and services we deliver and the actual costs? Then they analyze whether budget resources are effectively aligned with community priorities.

Priority-based budgeting empowers local governments to locate readily available resources by divesting from lower priority programs, identifying efficiencies and partnerships, as well as entrepreneurial revenue strategies. Identifying partnerships, efficiencies, and alternative revenue strategies frees up vast amounts of resources — up to 10% of entire budgets in some communities, as the city of Olympia, Washington recently experienced and reported.

Technology is making priority-based budgeting more powerful and easier to implement. For example, Tyler Technologies’ Priority Based Budgeting solution uses AI to help organizations analyze data and identify opportunities more effectively.

How to Start Rethinking Budgeting

Change is never easy. The best way to begin is often by working with experienced partners who can guide organizations through the process. Tyler and long-standing collaborators like Envisio and Polco provide end-to-end tools that help agencies create transparent, agile, outcome-focused budgets.

Another great place to start is by using the GFOA’s Rethinking Budgeting Readiness Assessment Tool. We’ve seen agencies distribute the questions to their staff, bringing more people into the budget conversation to surface valuable insights into what is needed.

Finally, another approach is to ingest an agency’s general ledger data into a software tool and produce a digital twin of the organization. It allows an agency to experiment with analyzing the data and mapping out possibilities. There is a lot of power in the available technology, especially some of the AI capabilities that exist today.

Sharing Insights and Success

While the process of Rethinking Budgeting may feel new and complex, many local agencies are already achieving success. Collier County, Florida, is one example. They were recognized with a 2024 Tyler Excellence Award after using Priority Based Budgeting to free up $37 million from their budget.

There is also the Rethinking Budgeting Trailblazers, a group of practitioners and leaders in their communities. Together with GFOA and others, they are sharing their insights at conferences and publishing articles to demonstrate that all of this is achievable, replicable, and scalable today.

The Future of Public Sector Budgeting

It’s an exciting time in public sector budgeting. Through the principles of Rethinking Budgeting, we can all work to improve public trust. We are also identifying new ways for the public and private sectors to collaborate.

I’m particularly passionate about the potential of regional resource alignment. It’s an area ripe for improvement and innovation. There are so many resources in nonprofits, academia, and the private sector that can be focused on goals they already share with our local governments. Everyone wants a better economy, safer communities, and smarter cities. I think our work together will naturally lead there.

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