30-Second Summary:

Efficient.  Effective.  Accountable.  Transparent. These are all goals local elected officials and staff routinely cite when crafting a budget. Achieving them, however, requires more than balancing revenues and expenditures. It also requires evaluating whether taxpayer resources are directed toward government’s highest priorities and producing meaningful results.

Local government has been evolving with the advent of new technology, changing service demands, and shifting state laws; the way local governments budget should evolve as well. Iowa has made significant strides in making local budgets more transparent, but transparency about how much government spends is not the same as accountability for what taxpayers receive in return.

Iowa’s Traditional Budget Framework

Iowa’s local budget structure retains many characteristics of traditional, incremental budgeting. Iowa Code Chapter 24 requires local governments to estimate revenues, the amount proposed to be raised through taxation, expenditures from each fund and for each general purpose, and comparisons with expenditures for similar purposes during the two preceding years.

Those requirements provide important fiscal controls and allow taxpayers to compare proposed spending with previous years. But they can also encourage the budget discussion to begin with an existing baseline:

What did we spend before, what do we propose to spend next year, and how much revenue is necessary to support it?

That is the essence of incremental budgeting. Existing programs and expenditures become the starting point, while debate focuses largely on increases or reductions around the margins. The problem is that this approach implicitly treats current spending as justified and necessary, rather than requiring policymakers to periodically reconsider whether programs are still needed, effective, or appropriately funded in the first place.

Instead, the budget should begin not with what government spent last year, but with what government needs to accomplish.

Iowa law already contains elements that can support that approach. For example, Iowa Code Chapter 384.16 requires city budgets to show expenditures for each program and comparisons among proposed, current, and actual program spending. Where practicable, the budget must also compare levels of service.

The opportunity is not to replace Iowa’s existing budget structure, but to build upon it.

Start with Priorities, Then Measure Results

Traditional budgets primarily tell policymakers about inputs: how much money is being spent, how many employees are involved, and what resources are being used. Those measures are necessary for financial accountability, but they do not necessarily tell taxpayers whether a program is accomplishing its purpose. The alternative is to establish priorities first and make funding decisions within available resources.

A priority- and performance-oriented approach instead asks:

• What are government’s core responsibilities?
• What results should programs and services accomplish?
• How will success be measured?
• How much money is available?
• What is the most efficient and effective way to achieve those results?

Performance measures then help determine whether those priorities are being achieved. They can measure outputs, efficiency, effectiveness, and outcomes—not merely dollars spent or employees assigned.

The concept of priority-based budgeting is not foreign to Iowa.  The Iowa League of Cities identifies priority-based budgeting as an approach that evaluates services based on why they exist, the value they provide, their cost, and how effectively they advance community priorities.  In simple terms, the goal for budget conversations is to move away from “How much are we spending?” to “Why are we spending it, and what are taxpayers getting for their money?“

This Approach Has Worked at the Local Level

This is not just a theoretical exercise. In 2004, Snohomish County, Washington, adopted a “Priorities of Government” approach to developing its budget. Rather than rolling the previous year’s budget forward, county leaders began by identifying the outcomes they wanted government to achieve and funding priorities accordingly.

Departments competed for limited resources based on how effectively their proposals addressed those priorities. The approach helped the county address a multimillion-dollar shortfall while preserving its highest-priority services.

The process was still in use years later. As the county “built a from-scratch budget for 2010,” officials continued using the process to keep spending focused on priorities.

Snohomish County is not alone. Local governments across the country have adopted similar approaches. Fort Collins, Colorado, continues to use Budgeting for Outcomes, where its strategic plan guides funding decisions. More recently, Kansas City, Missouri, shifted to Priority-Based Budgeting, evaluating programs and services based on their value to the community rather than relying on prior-year allocations. Collier County, Florida, implemented priority-based budgeting for FY2025, evaluating programs based on factors including impact, cost, whether a service is mandated, and residents’ reliance on the county to provide it.

The principle is simple. Determine priorities first, then build the budget around them. If county officials in Snohomish County could successfully rethink their budget during the Great Recession, Iowa local officials can do the same in 2026 and beyond.

From Spending to Results

Iowa has already built substantial transparency and financial controls into its local budget laws. The next step is to place greater emphasis on priorities and results.  Instead of asking how much more or less to spend than last year, local officials should first ask what government needs to accomplish and then direct limited taxpayer resources toward the most effective ways of achieving it.

The change will not happen overnight. But over time, that discipline can produce better budget decisions, greater accountability, and something taxpayers deserve alongside spending transparency: results transparency.