Local governments are facing a widening gap between aging municipal facilities and the resources available to modernize them. While deferred facility maintenance continues to stack up, federal funding and the skilled professionals needed to address the backlog are becoming harder to find.
To manage this uncertainty, local governments must embrace digital, data-driven facility planning. Better data means being better able to plan for big facility expenses, rather than absorbing them as surprise shocks to next year's budget. And better long-term planning can relieve everyday budget strain by reducing overall operating costs.
Cities regroup against shrinking federal funding
84% of municipalities now cite insufficient capital budget as a top infrastructure barrier, alongside rising labor and materials costs, as local governments grapple with a nearly $100 billion backlog in maintenance for publicly owned buildings. According to the National League of Cities' (NLC) 2026 Municipal Infrastructure Conditions Report, the share of municipalities rating their public buildings in good condition fell to 29% in 2026, while the share rated "not satisfactory" climbed to 25%.
This decline coincides with what NLC’ CEO Clarence Anthony describes as winding-down federal investment, like the Infrastructure Investment and Jobs Act (IIJA), which had previously boosted local project development. Nationally, NLC has called for "a reliable federal partnership" as Congress weighs future infrastructure legislation.
When project funding arrives but skilled labor doesn't
Even when funding is available, many local governments lack the skilled staff needed to scope, manage, and execute facility projects.
Jess Davis, Performance Manager for Digital Services at Schneider Electric, describes the problem he’s seeing municipal clients face this way: "We're seeing far fewer people entering facilities management and mechanical trades, and many experienced facilities professionals are approaching retirement. That creates real uncertainty for districts that have relied on one or two key individuals to manage and maintain complex building systems."
That firsthand experience is reflected in the data. National survey data on state and local government employers found that 54% anticipate a large wave of retirements in the coming years, yet only 12% have a formal succession plan in place. Skilled trades ranked among the hardest positions for local governments to fill, alongside closely related functions like building inspections and engineering — all core to facility and capital asset operations. And local governments aren't just competing with each other for scarce talent; they're competing with an entire industry facing its own historic shortage. Data shows that the construction sector needs 349,000 net new workers in 2026 just to keep pace with demand and retirements, and 92% of firms nationally report difficulty finding qualified workers.
The two problems (funding and staffing shortages) are compounding each other. When experienced staff retire, municipalities often lose critical information about past maintenance cycles and assets nearing end of life. Without that knowledge, new staff may miss signs of deterioration or delay preventive work. That can shorten asset lifespans and drive up emergency costs precisely when municipal budgets are least able to absorb them.
Disciplined capital planning helps cities prioritize scarce resources
Despite these dual pressures, the NLC’s 2026 Municipal Infrastructure Conditions Report found that strategic infrastructure planning has declined. According to the report, use of formal strategic plans among survey respondents fell to 42%. NLC suggests that may reflect city leaders shifting toward more reactive decision-making as they contend with inflation, workforce shortages, and aging infrastructure.
Another striking finding is that even as public building conditions have declined, they haven't seen a corresponding rise in capital priority. NLC's data places public buildings in the "low condition, low priority" quadrant of its priority-versus-condition analysis, a category shared only with parking lots. NLC suggests this may reflect, among other factors, lower visibility of building systems compared to infrastructure that residents interact with more directly, like roads and water systems.
Facility leaders cannot afford to let strategic planning fall behind. When budgets are tight and staff capacity is stretched, planning and visibility become more valuable, not less. Forward-looking municipal leaders must shift from reactive facility management toward more structured, data-driven capital planning.
In practice, that starts with a comprehensive Facility Condition Assessment (FCA): a clear, current inventory of asset age, condition, replacement cost, and criticality across an entire facility portfolio.
Continuous facility data lowers budget risk
An FCA serves dual purposes. It helps municipalities identify the highest risk assets when prioritizing upgrades, and it protects institutions against staff turnover by capturing what used to live only in one retiring employee's head. Plus, buildings with strong condition data, built around documented asset life cycles and clearly prioritized investment needs, are far better positioned to compete for scarce capital dollars.
However, an FCA only makes capital planning and budget approvals more smooth for as long as its data stays current. While traditional FCAs are static snapshots that must be regularly updated, Schneider Electric's Capital Asset Planning (CAP) solution instead enables Continuous Facility Condition Assessments, giving facility leaders a real-time, dynamic view of asset health.
With that live data in hand, local leaders can build multi-year capital plans organized around documented asset life cycles and clear prioritization criteria, ensuring the most critical systems get addressed first. Digital platforms like CAP go further than spreadsheets can, offering cost forecasting and financial scenario modeling. That level of visibility can help facility leaders save money by identifying aging equipment that carries higher operating costs, so they can build a planned phase-out strategy.
Better facility data helps municipalities navigate uncertainty
Federal funding uncertainty and workforce scarcity are not problems local governments can solve on their own. However, municipalities can plan around those pressures with better facility data and a clearer capital strategy.
A living, continuously updated Facility Condition Assessment helps centralize institutional knowledge, prioritize limited capital dollars, and support stronger funding requests to councils, boards, and taxpayers regardless of what happens in Washington.
Connect with a Schneider Electric advisor to start building a smarter capital asset roadmap for your organization.
