THE SAD WORLD OF UNDERFUNDING

It’s fulfilling for governmental leaders to come up with good notions for new programs or infrastructure designed to make life better for the citizenry. And from our perspective, it’s a lot of fun to write about them – often when they’re just out of the pilot stage.

Unfortunately, in all too many cases, even the best ideas go begging for enough operating cash to fulfill their promise.

We first became aware of this phenomenon many years ago, when we wrote about counties and states that were building prisons to alleviate overcrowding.  Pretty soon, problems began to crop up for entities that hadn’t appropriately considered the operating expenses required to put people inside.

One famous case was the Wapato Detention Facility in Multnomah County, Oregon, which was funded by a bond issue. It cost $58 million, but the county never came up with the money to operate the facility. While it was finished in 2004, it was never opened as a detention facility and wound up in the hands of a couple of developers, with a price tag that was ultimately around $5 million. In October 2020, it was turned into the Bybee Lakes Hope Center, aimed at building “self-sufficiency and skills to transition to life after homelessness,” as described in a Portland.gov website

We haven’t seen something as dramatic as the Wapato Detention tale in recent years, but the failure to consider operating expenses is still an issue worthy of note.

Consider, for example, the police departments, school districts and transit agencies that are accumulating unfathomable amounts of digital video and surveillance data every year. Much of this massive footage is emblematic of the tree that falls in a forest, and nobody hears.

Stockpiling film by itself is pretty much worthless unless money is set aside to provide review personnel, redaction, and storage infrastructure that’s necessary to use this material lawfully.

The result: city attorney offices and clerks face huge backlogs, long missed deadlines and expensive litigation.

There are also instances in which governments spend money unproductively because they’ve chosen not to make upfront investments that would benefit residents. Consider unproductive and vacant parcels of land which belong to the city after the owners fail to pay their taxes.

When governments bypass efforts to develop the land, they still need to devote public dollars to at least minimal maintenance. If they don’t, vacant parcels can become eyesores that accrue garbage, rat infestations and dead trees, which require pruning to keep branches from crashing into the street in a storm.

Unfortunately, public works departments often lack budgets to take care of these properties and the opportunity to repurpose them is passed by for lack of the money to do so.

Deferred maintenance provides another significant example of how underfunding can have long-term impact on roads, bridges, buildings, parks and other public assets.

While the initial announcement provides excitement, positive attention fades over time if funding for maintenance is left out.

In fact, every time budgeters put off spending cash on regular maintenance, they’re making the decision to spend more money later. If a road can be resurfaced this year, that will help put off the possibility of having to rebuild the road entirely in years to come.

Worse yet, many places don’t even keep good track of what they should be spending in any given year. As the Pew Charitable Trusts wrote in late 2025, “The true costs of deferred maintenance—the accumulated gap between what should have been invested to preserve, maintain, and repair public infrastructure and what was actually spent—are difficult to determine because most states don’t consistently define, measure, or report deferred maintenance in their budgets or capital planning documents. And without clear data, policymakers lack the necessary information to understand how current policies might fall short.”

One last example of this phenomenon comes in the significant investments that entities can make in brand new technologies (notably AI in recent years). Over the years, we’ve repeatedly witnessed the vulnerability of training funds, especially when budgets grow tighter. Ensuring consistent funding for training is needed to ensure that technology investments genuinely pay off

The ramifications of underfunded training aren’t immediately obvious internally and are pretty much invisible to the general population. But leaving employees without appropriate education inevitably means that the benefits of the initial investments will be less than they could have been.

We’d like to offer up a call to action for state and local officials: If you make an investment of any kind be certain that you can truly make it pay off, even though that will cost more dollars on an ongoing basis.

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