The National League of Cities (NLC) has released its latest edition of its State of the Cities report, highlighting municipal priorities, challenges and opportunities across the nation. While economic development remains a top priority, local leaders are contending with long-term challenges associated with housing, infrastructure and workforce development.
Over the past year, the NLC compiled data pulled from State of the City speeches across the country, assessing patterns and recurring talking points indicating the direction and focus of the nation at large. Economic and workforce development rose to the top as the leading issues, accounting for 31% of overall speech duration, followed by an increased focus on infrastructure investments accounting for 27% of speeches.
Other key topic areas include:
- Public safety and health/human services – 15%.
- Housing – 11%.
- Budget/management – 9%.
These priorities reflect a growing need to nurture a stronger economic presence by attracting businesses, revitalizing downtown areas and strengthening workforce pipelines. Much of this shift can be attributed to the significant decrease in federal involvement and funding since the new administration took office. With less federal support, municipalities must find their own way to effectively manage budgets as major grant programs end.
Self-sufficiency and turning to state support has been the defining approach for counties, cities and towns looking to responsibly manage local investment and growth over the past year. Local leaders have begun tackling key economic development issues, spearheading efforts to address business retention and insufficient investment. The top challenges these leaders face largely include:
- Attracting businesses.
- Insufficient federal and private investment.
- Insufficient childcare providers.
- Poverty.
- Underemployment and unemployment.
- Inequality.
Given these focuses, leaders are pursuing options to activate their local economies and to encourage stable workforce development. The top strategies adopted by mayors across the nation tend to ring around business attraction and retention; downtown revitalization; workforce development; investing in tourism and hospitality; innovation and technology; and increased green and sustainable development. Actionable solutions include increasing investments in the arts, establishing business improvement districts, deploying shelter services and beautification, adopting AI, skills training and encouraging tourism.
Infrastructure has also remained as one of the top concerns for the nation as aging structures deteriorate and increasing population density escalates demand. Transportation, public utility systems and resiliency priorities dominate the scene – but local efforts are hampered by diminishing federal funds and high interest rates and inflation.
Local leaders were among the greatest beneficiaries for the previous federal administration’s infrastructure investments. Groundbreaking programs such as the American Rescue Plan Act and the Infrastructure Investment and Jobs Act injected billions into local communities across the nation, enabling critical upgrades to infrastructure across all industries, scales and levels. However, with these programs ending, many leaders will have to reevaluate their spending to avoid budget shortfalls and support essential infrastructure systems.
Beyond infrastructure, mayors and their constituents alike have highlighted the need for an increased focus on public health and safety. These primarily revolve around addressing rising mental health and substance abuse challenges, followed by other pressing concerns such as cybersecurity, emergency preparedness, environmental health, property crime, suicide, traffic accidents and violence.
Assessments have shown that most of these concerns are interconnected, both with each other and with other high-priority categories such as housing. Improving public health correlates to improved public safety – making investments to improve mental and physical healthcare directly impacts lower crime rates, higher quality of life and better stability.
At the national scale, mayors have proposed two top policy areas to guide decision-making processes and program development: creating or expanding alternative crisis response teams and retaining and recruiting a diverse public health and safety workforce.
Housing also remains a hot button issue as local communities are tasked with handling rising costs and lack of accessibility to affordable alternatives. While these two issues are the dominant concerns for local leaders – 75% and 71% respectively – other leading concerns include:
- Community opposition/NIMBYism – 33%.
- Vacant, abandoned and deteriorated properties – 33%.
- Low quality of housing – 27%.
- Homelessness – 25%.
- Land use restrictions – 18%.
- Displacement – 10%.
Low ratings for housing attainability, prohibitive infrastructure costs and lost federal funding opportunities are some of the primary reasons why municipalities can’t expand local housing supplies. To address these issues, mayors are investing in taking innovative approaches and seeking new funding options to advance affordable housing development and provide all residents with acceptable living conditions.
Effectively managing city budgets has been a throughline for virtually every conceivable issue mayors face for the coming years. As major federal programs end, municipalities will no longer have critical support needed to support infrastructure investments and promote economic growth. As a result, leaders are refocusing on proven strategies to recalibrate budget management and prioritize spending. These include:
- Implementing a strategic plan.
- Utilizing programs and services with performance measures.
- Leveraging the expertise of consultants and staff.
- Creating a formula based on historical data and projections.
- Implementing participatory budgeting processes.
City leaders will also begin to diversify their funding streams, primarily split between restricted and unrestricted funding options. Restricted funding is designated for specific purposes and can only be applied to those use cases. Unrestricted funding offers greater flexibility, enabling cities to address priorities as needed.
These top priorities reflect mayoral concerns, outlining how their decision-making and strategic processes will be influenced in both the near- and long-term. However, the NLC also conducted a survey on how the public’s concerns align or diverge from their leaders. While some issues are aligned, constituents expressed greater interest in the following areas:
- Budget and management – 24%.
- Economic development and workforce – 20%.
- Energy environment – 17%.
- Housing – 10%.
- Public health and safety – 9%.
- Infrastructure – 8%.
- Education – 7%.
Spending and economic structural challenges take the lead, surpassing 2025’s analysis where energy, environment and education were the public’s highest concerns. While several of these topics differ, housing and public health/safety seem to be largely aligned.
Photo by Greg Thames from Pexels
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