When Cities Pay Cash for Infrastructure, Who Really Pays? (OPINION)

A shift toward pay-as-you-go financing looks disciplined on a balance sheet. But decades of public finance research, along with GFOA guidance, say the choice is more complicated than simply cash vs. debt.

GOVERNING Craig S. Maher

Sept. 22, 2026 

The National League of Cities’ 2026 Municipal Infrastructure Conditions Report finds that municipalities are increasingly funding capital projects out of current revenue rather than borrowing — a shift the NLC attributes to “both fiscal caution and limited financing capacity.” Property taxes, which account for roughly 60 percent of municipal tax revenue and are relied on by nearly 90 percent of cities, increasingly cover both operating costs and capital cash needs.

View the full article: Governing.com