The results of the HilltopSecurities Public Finance Leaders 2026 survey provide a cautionary look at the capacity constraints and budget challenges facing state and local governments at a time of dramatic technological developments.

“Public finance leaders will enter 2027 facing greater demands, but also limited capacity, and continued workforce pressure,” said Tom Kozlik, Head of Public Policy and Municipal Strategy.  “Governments are being asked to manage increasingly complex issues many of which without clear or settled answers.”

Of the 569 survey responses, 45% came from cities, towns and villages, 15% from counties; 10% from school districts and 7% from states, with public universities, and other public sector entities making up the rest. According to the October report, “The findings most clearly reflect the pressures facing cities and counties and should not be assumed to represent every public-sector category equally.

Workforce, fiscal and infrastructure pressures head the list of challenges that leaders said they faced in 2026.

Although other surveys have revealed improvement in some hiring issues, there are still many areas of government in which strains exist. In the 2026 survey, labor and staffing narrowly topped budget and pension issues as the top challenge for finance leaders. “I am watching the workforce issue closely. Demographic pressures and retirements could make hiring more difficult, although continued interest in public-sector careers offers some encouragement,” said Kozlik.

This year’s top challenges, followed by several cost categories and both local and federal legislative changes, have pushed cybersecurity down in the list  from one of the top five spots in the 2024 survey. Speaking of cybersecurity, Kozlik said “I do not think its decline in the rankings means officials see it as less important. Rather, more immediate financial and policy pressures have moved ahead of it, particularly as federal actions have complicated the outlook for state and local governments since early 2025”.

He also emphasized the importance of innovation given this year’s survey results. “Current challenges make innovation essential,” he said.  With technology transforming services, “Government managers must respond to this change in real time. Public leaders must distinguish what is known from what remains uncertain, modernize despite limited resources, and build organizations that can adapt as conditions change”.

#TopChallengesForStateLocalFinanceLeaders #StateandLocalFinanceLeaderSurvey #2026HilltopPublicFinanceLeaderSurvey #StateandLocalFinancialChallenges #StateandLocalFinancialManagement #StateandLocalInnovation #CityFinanceChallenges #CountyFinancialChallenges #TownFinancialChallenges #SchoolDistrictFinancelChallenges  #CityFinancelManagement #CountyFinancelManagement #TownFinanceManagement #SchoolDistrictFinanceManagement #CityTopFinanceChallenges #CountyTopFinanceChallenges #HilltopSecurities #StateandLocalInnovation #StateandLocalGovernmentHumanResources #StateandLocalCybersecurity #StateandLocalFinanceHiring #StateandLocalGovernmentBudgeting #StateandLocalManagement #StateandLocalPerformance #CityGovernmentManagement #CountyGovernmentManagement #StateandLocalManagementNews #StateandLocalFinanceNews #TomKozlik #BarrettandGreeneInc