Zero-Based Budgeting: The Secret Weapon for City Efficiency

Harnessing Zero-Based Budgeting to Drive Efficiency in Municipal Government

City leaders are under constant pressure to do more with less. Revenues remain tight, yet demands for services continue to grow. The question every finance team faces is simple: How do we make sure every dollar works harder for the community?

One answer is zero-based budgeting (ZBB), a method that requires departments to explain and justify each budget request from scratch. Unlike traditional budgeting, which uses last year’s numbers as a starting point, ZBB pushes city officials to re-evaluate programs, rethink priorities, and cut unnecessary spending.

As someone who has worked with budget reviews and financial planning, I’ve seen how traditional budgets can keep outdated programs going just because “they’ve always been there.” ZBB breaks that habit, opening the door for new ideas and better alignment with city priorities.

Why Zero-Based Budgeting Matters

Cities often carry forward spending that no longer matches what the community really needs. Zero-based budgeting helps shine a light on those old habits. Instead of automatically approving last year’s spending, it asks whether each program still delivers value and fits today’s goals.

ZBB encourages questions like: Is this program still helpful? Can we move resources to services that make a bigger impact? Does this support long-term goals like sustainability or fairness? These questions help make sure city budgets reflect current priorities, not outdated ones.

For example, one city library system I studied used ZBB to take a hard look at its outreach spending. They realized some programs weren’t getting much traction, so they shifted funds to digital literacy workshops. Not only did this save money, but it also expanded services that better served residents. It’s a great example of how ZBB can support both efficiency and fairness.

How to Put Zero-Based Budgeting Into Practice

Trying to roll out ZBB across an entire city all at once can feel like too much. A step-by-step approach tends to work better. It gives teams time to get familiar with the process and improve their methods before scaling up. Starting with just a few departments can build momentum and show some early wins