Local Government 101 - Local Budget Process

A major aspect of ensuring the delivery of quality early childhood programming is adequate and sustainable funding. There is a strong interaction between state policymaking and local authority and responsibility to craft a budget that invests in quality communities and supports children. Local governments are increasingly at the forefront of smart policy and investment strategies that can improve systems and outcomes for children.

Caution: Local investment cannot replace state and federal support. The need for investments in young children far exceeds a community’s capacity to meet on its own.


Ability to Raise Local Funds Impacted by State Law


North Carolina’s state tax code has undergone significant changes in recent years. These changes have implications for local governments in terms of the availability of revenue, responsibility for service delivery and tools available at the local level to fund quality services for children and families. Local governments derive authority to make spending decisions from state law. In other words, the state tells local governments what they can and cannot do. North Carolina General Statutes outline the purposes for which municipalities, counties or other special local governing bodies may raise funds. For early childhood, there are existing authorizations in General Statute (law) that provide opportunity for early childhood advocates to seek local dollars.

State law also establishes the authority for local governments to raise revenue and set tax rates. The state makes regular adjustments to that authority, which impacts local budgets.


Since 2018, the state has granted the authority to municipalities to fund public schools. Municipalities may  “supplement funding for elementary and secondary public education” that benefit the residents of the municipality.


Similarly, counties have authority to fund the education of their citizens and social services with limits placed through statute on specific programs in education delivered through the School District or with a focus on low- and moderate-income citizens.

Participatory Budgeting


Participatory budgeting is a democratic process for community members to make decisions about how to spend public money at the municipal or county level. A portion of the budget is set-aside for taxpayers to decide how to use the funds. The local government entity must decide to use participatory budgeting in its community and then establish a process.

While processes vary by community, a typical process involves a local government setting aside funds for the process, community residents brainstorming and sharing ideas on spending, developing proposals for projects and ultimately voting on the projects to be funded. The local government then implements the decision.

GreensboroparticipatorybudgetIn 2018 the Greensboro, NC City Council created a participatory budgeting process (PB). Community members from the city’s five districts each decide how to spend $100,000 per district for a total of $500,000. Each cycle lasts two years and the City approves the amount of funds available for the participatory process.

Residents submit ideas and the 11-member, volunteer, City Council- appointed PB Commission vet them. Winning projects are submitted to the City Manager for inclusion in the proposed budget and sent to the City Council for adoption.

Many communities across the country use participatory budgeting in their annual budget process. Participatory budgeting could be one way to start a conversation about community investments in early learning.