​Mayor Thompson's administration implemented Priorities-Based Budgeting (PBB) to the 2026 budget but felt the results could improve. PBB focused on values, not results. Facing new revenue limitations, the administration is transitioning to Outcome-Based Budgeting (OBB) for the 2027 budget. OBB shifts the budget question from "what are our priorities," to "how will we know if these priorities worked?"
​
What Is OBB? How Does It Work? 
OBB is the process of aligning resources with available funding and puts an emphasis on expected outcomes. While it follows a similar vision alignment like PBB, it stresses measurable outcomes and transparency. This strategic budgeting process:

• Rewards innovation.
• Measures performance.
• Makes the budget process more transparent.
• Creates a comprehensive budget document.
• Allows for flexibility and alternatives, with long-term planning opportunities.

Roadmaps and Applications from Case Studies
Cities like Baltimore, MD and Winder, GA have successfully implemented OBB in their budget process and continue to each year. While their cities are bound by different populations with different needs, their roadmaps are very similar:

1. Engage with public to articulate policy and service expectations of the council, residents, and customers. 
2. Narrow expectations to agreeable priorities. Ensure that expectations are meaningful and measurable. 
3. Collaborate with operational staff that will be providing the expected service and finance teams on calculating cost estimates to provide the service and the fully burdened personnel costs. 
4. Identify available funding resources and connect streams of revenue to expected costs. Be sure to prepare alternative revenues to consider.
5. Bring municipality leadership together to present fully burdened cost projections, available resources, funding gaps, and alternatives (presenting alternatives in comparative format is recommended).
6. Once the budget is approved, leadership may now train, equip, and lead operational staff in achieving desired outcomes and also develop standards to evaluate progress. 

With the OBB need for enhanced collaboration, cities have used mixed leadership structures and teams to manage implementation. Baltimore has a mayoral leadership team which leads budget talks and assembles Results Teams made up of mayoral staff, city department staff, budget and performance staff, and two citizens. Results Teams are tasked to coordinate with city agencies and articulate outcome priorities and costs. Creating these teams makes organizational sense when applying OBB framework to a population of 568K people. The city of Winder with a population of 21K, has a Chief Administrative Officer (CAO) spearheading the incentive with assistance from the ICMA and city leadership. OBB relies on flexible and honest leadership for successful outcomes, and a structure that has capacity to meet population needs. 

What the City Should Consider
While this approach is incredibly comprehensive and transparent, it is inconvenient. It incorporates everyone into the budget discussion, takes in-depth understandings of programs, services, staff, revenue, and other expectations into account, and enhances collaboration. While these are all good things a city should have in its budget process, it is extremely time consuming and labor intensive. With that considered, the City Council Fiscal Committee has started timeline conversations now to prepare for the ambitious 2027 budget. The next questions should address how to organize roles during this budget process.  How will Bloomington delegate leadership roles to move OBB forward?

On Wednesday, October 8th, the Bloomington City Council voted to pass the $163 million budget for 2026. This decision had two dissenters: Councilmembers Flaherty and Rosenbarger due to lack of trust in the mayor’s administration. The $163m budget increased from $147m last year, mostly due to the $12m in anticipated revenue from the Food and Beverage Tax.  
There were some notable changes and appropriations to the budget, including:  

• General Fund expected expenditures are $65m, $27.5m from adopted tax levy.
• 2.7% Cost of Living Adjustment (COLA) for staff not under the collective bargaining agreement. ​
• $5m in unspecified cuts.
• $11m expected reserve drawdown, basically taking $11m from savings which has been a trend in the past two years. 
• Salaries and wage expenses moved from being appropriated from the General Fund to now the Economic Development and Local Income Tax (ED LIT) fund.
• Parks and Recreation fund moved to General Fund.
  ​​

The city has done less with less by imposing a hiring freeze, diversifying their revenues, and overall being creative. Designing and agreeing on the city’s 2026 budget was no small feat. However, they will have to do more.  SEA 1 is already showing fiscal drawbacks, as the city is working with $1.4m less than they would have for 2026. The city has about $414m in outstanding debt, including interest, according to City Controller McClellan. The city is also operating in a deficit and by the end of next year, will have spent $30m more than it collected. 
 
Comparing past spending, the city had projected deficit spending in the last 5 budget years but ended in fiscal surplus. While the city track record shows resilience, they have not treated the city’s deficit like the vulnerability it is. The city needs to prioritize lowering the deficit, but this will be much harder to do with SEA1's implications. To do so, they will need to cut personnel to get the outcome-based budgeting this Mayoral administration is looking for. It is fiscally necessary to make the cuts that will hamper progress the least, and that will likely translate to putting new hires on the chopping block.  
​
Serious reductions need to be made for the city to continue healthy fiscal standing.  

At the September 30th Monroe County Council meeting, former Councilor Geoff McKim offered a candid reminder about the challenge facing our community: Monroe County’s projected $4.4 million budget deficit is not being driven by office supplies, travel, or one-time capital expenses. It is overwhelmingly tied to personnel costs — the number of employees, salary adjustments, and the rising price of benefits like health insurance.  The Chamber has repeatedly spoken about the need to rein in the number of FTE(s) in the city and county.

Why Personnel Costs Matter
Personnel costs are by far the largest part of county government spending. When the budget is out of balance, trimming small items such as supply accounts or travel lines is not nearly sufficient and not the best use of time. To restore fiscal health, the conversation must turn to:

• How many positions are funded by the General Fund.
• How large the annual cost-of-living adjustments (COLAs) are.
• How fast health insurance costs are escalating.

McKim’s testimony made it clear: “There is no path to fiscal balance that doesn’t involve addressing personnel costs.”

The County Council’s Challenge
This is an incredibly difficult process. Council members hold the purse strings, but they do not have direct administrative control over how department heads run their offices. They cannot simply order a department to restructure its organization chart, consolidate functions, or streamline staff. They can set budgets, but the day-to-day changes that create efficiency must be driven by department leaders themselves.

Councilmember Kate Wiltz emphasized that approving a hiring freeze or budget adjustment is only the first step. Implementation is just as important. Since departments are self-contained, the Council’s best tool is to require trade-offs — for example, if a department wants to add a new role, it may need to eliminate another position to keep staffing levels in balance. This approach forces departments to think strategically about their FTE flow charts, maximizing the utility of each role rather than simply expanding.

Local Government’s Short Runway
The challenge is compounded by the broader framework in which counties operate. For better or worse, local government is a creature of the state. Monroe County must work within mandates set by the Indiana General Assembly, even when those mandates restrict flexibility. Senate Bill 1 (SB 1), for example, reshaped property tax and local income tax structures in ways that limit local revenues. It gives counties only a short runway to adapt, while cost pressures continue to grow.

This makes the work of local officials even more critical. The Chamber believes the best government is run by leaders who live in the community and understand its needs firsthand — not by part-time legislators who rarely see the consequences of their policies on local budgets. We have local elections for a reason.  County councils and commissioners are best positioned to balance fiscal responsibility with community priorities.

The Chamber’s Own Experience
The Greater Bloomington Chamber of Commerce faced a similar challenge several years ago. Our organization was not immune to financial pressure. We made the difficult decision to reduce the number of full-time employees (FTEs) while at the same time raising salaries for the remaining staff. The result was a leaner, more efficient Chamber that stayed true to its mission and came out stronger.
It was not easy, but it worked. And it showed that sometimes the right path forward is not across-the-board cuts, but fewer positions with stronger pay, resulting in higher productivity and fiscal sustainability.

Moving Forward
The Chamber respects the hard work of county employees and the elected officials who must make these decisions. But as advocates for the business community, we stress the importance of fiscal discipline. Unchecked deficits today could lead to higher taxes tomorrow, directly impacting local employers and residents alike.
As the County Council continues budget deliberations, we encourage them to pursue sustainable, structural solutions to personnel costs. It may require tough choices — but, as our own experience proves, those choices can put an organization back on a stable footing, better in the long run.