"Financial innovation" can be a genteel way of saying “a technical solution to a political problem.” Large projected budget gap and no agreement on how to close it? A “scoop and toss” debt refinancing can help. Council wants a new fire truck but can’t agree on how to pay for it? Make those dollars appear with a mid-year budget adjustment—and so forth. This type of innovation can clear a path to political agreement. But it can also allow elected officials to ignore structural financial problems that become exponentially worse with time. Today’s state and local finance officials continue to grapple with the broader ethical and policy questions that surround this type of financial innovation.

The defund the police movement stoked some of the most contentious local political debate in recent memory. Leaders of and against that movement disagreed on basically everything. But they did agree on one key point: police are too often dispatched to situations they’re not equipped to manage. This is especially true for emergencies rooted in substance abuse, untreated mental illness, developmental disabilities, and behavioral health concerns.

• Publication date: February 2023
• Author: Justin Marlowe