The 2025 State of Local Government survey highlighted critical issues facing governing organizations today
Rochester, N.Y. (April 21, 2025) – The Bonadio Group, a nationally ranked IPA Top 50 CPA firm, today announced the results of its 2025 State of Local Government survey, which was designed to assist New York State (NYS) government entities in evaluating their position on key issues and addressing various challenges.
“This year’s survey findings concluded that most respondents are cautiously optimistic about the current state and near-term outlook of NYS governments, but they continue to face a number of critical issues around labor shortages, unfunded mandates, regulatory compliance, and more that are hindering sustainable success,” said Tim Doyle, The Bonadio Group Consulting Partner, Public Sector & Not-for-Profit. “To maintain fiscal stability and meet service demands, it’s clear that local governments in New York must adopt proactive financial strategies.”
The survey captured data from government entities with less than 25 public service workers to those with more than 200 employees. Input was provided by 25 respondents from across New York State who hold positions at government organizations that oversee counties, public authorities, and cities. The study presented a series of questions that covered five major topics: financial strategies, technology investments, labor shortage solutions, current top issues, and future outlook.
Key Findings
Financial Strategies
- Nearly half of respondents have not developed a long-term fund balance, and 25% noted that they experience consistent cash flow concerns related to changes in regulations and outside environmental factors including mandates and payments from governmental contractors or other governments. Due to this, many organizations are looking for revenue enhancement strategies. For example, 90% of respondents have opted into adult-use cannabis retail dispensaries or onsite consumption licenses, and others are pursuing a shared service model with other organizations like municipalities and schools.
Technology Investments
- The use of technology in local governments has significantly improved efficiency, transparency, and service delivery. At the same time, 39% of survey respondents were not satisfied with their current financial software and 88% admitted they had not changed it in the last five years. In addition, cybersecurity has remained a major concern for government agencies as they work to protect sensitive data from threats. In fact, nearly 25% of respondents had experienced a cyberattack in the last two years. However, these concerns haven’t necessarily led to an adoption of more advanced technology. It was noted that this was due mostly to cost (44%) and resistance to change (31%).
Labor Shortage Solutions
- The survey found that 75% of respondents are struggling to find enough labor to meet workforce demands. With a majority of respondents noting a turnover rate of under 15% among a majority of respondents, the labor shortage can be attributed to difficulties recruiting new staff into public service.
- Poor succession planning and lack of flexibility play a role as well. For example, only 46% of respondents noted having a formal succession plan for key positions. Another recruitment challenge in a post-COVID world is a workforce that has built a preference for hybrid or remote work options. However, due to the nature of working in local government, 78% of respondents reported having a necessary, fully in-person workforce.
Current Top Issues
- The survey noted that 50% of respondents cited budget and budget management as the most worrisome area of their government’s operations. Local governments face a series of issues associated with planning and predicting funding sources each year. Those challenges are compounded by ever increasing payroll expenses for employees, the growing cost of goods and services, and increasing natural and climate-related emergencies making it more difficult than ever to accurately estimate budgets.
- Long-term strategic planning was also cited as a growing concern. Respondents cited numerous fiscal and operational worries—such as housing and homelessness, uncertainty of funding, and staffing—which are designed to be addressed in a strategic plan. Also, 40% of respondents noted that they are not receiving adequate quotes and responses in their procurement bidding processes. Fraud is an ever-present challenge as well, with 37% of respondents considering it a major risk to their entity, so much so that they have a hotline in place.
Future Outlook
- Economic Trends: The state’s 2% property tax cap, rising pension and increasing healthcare obligations for public employees are all factors putting pressure on local budgets. To combat these, local governments need to consistently focus on long-term fiscal sustainability solutions such as sharing services, consolidating government functions, or reducing services.
- Demographic Changes: Upstate New York is experiencing population loss and an aging population that increases the demand for healthcare and senior services, while shrinking the tax base and reducing the workforce.
- Technology and Digital Government: Investments in digital governance, smart city technology, and artificial intelligence-driven services could enhance efficiency and cut costs. With technological advancements, however, comes an increased need for cybersecurity investments to prevent sophisticated data breaches and cyberattacks.
For more information about The Bonadio Group and its 2025 State of the Local Government survey, visit www.bonadio.com.
About The Bonadio Group
The Bonadio Group is a nationally ranked IPA Top 50 CPA firm and the largest independent provider of accounting, assurance, tax, and consulting and advisory services in Upstate New York. The firm maintains several offices across the country, with team members operating globally. Its expert team of industry-leading professionals serve as trusted advisors to clients of all sizes, helping businesses and organizations reach their short- and long-term goals. The Bonadio Group is committed to delivering top-tier client service, providing continuous community support and creating an unparalleled employee experience. For more information, visit www.bonadio.com.