22-07-2025
The Cities and States That Are Getting It Right
President Trump's domestic policy law will create big budget problems for many states and cities. Budget shortfalls aren't new, and neither is the playbook that leaders usually follow. They make across-the-board cuts to programs and raise fees and maybe taxes. Inside government agencies, they emphasize sharing the pain: implementing hiring freezes, instituting furlough days for public employees and laying off workers based on seniority. Nobody is happy, but at least the approach is equitable and minimizes disruption.
This is the wrong playbook. Those who follow the across-the-board approach will end up cutting teachers or raising subway fares while protecting jobs that could have been automated years ago. The public is already frustrated with government for unkept promises and often sluggish services. If our leaders simply manage cuts to avoid upheaval, that frustration will only rise. Now is the time for intelligent disruption.
Government feels like it's stuck in an earlier era because it often is, operating in a model that hasn't served us for decades. Our industrial-age bureaucracies were slow to adapt to the internet era, and now they risk missing the boat again as the world hurtles into a new technological revolution. As budgets shrink and public needs grow because of this new law, defending the status quo isn't just inefficient; it's also immoral.
To transform the operations of the public sector, leaders will need both courage and creativity. Government unions and contractors alike will be uncomfortable. The question is whether to prioritize the needs of the existing system or the needs of the public it is supposed to serve. A few pioneers are choosing the public, responding to the coming crisis by ensuring that our public institutions have the right people doing the right work. Other states and cities should follow their lead.
In Denver, which is facing a budget shortfall, the city recently moved to change its layoff rules. In many states and cities, layoffs must be based on seniority, and a more senior employee can bump a more effective junior one. Mayor Mike Johnston changed that, and Denver's new rules instead instruct managers to weigh employees' performance history, abilities and length of service.
At the meeting where the city's Career Service Board approved these changes, a crowd that included city workers booed and shouted, 'Shame.' But Denverites should applaud their mayor for putting the government's ability to serve the public first.
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