The Planner's Paycheck: A Foundation Based on Disruption

As planners, we serve a vital function by helping communities manage growth and navigate change. Consequently, the decisions federal, state, and local officials make about how to pay for planning have consequences not only for the future of the profession but also for the long-term health of the communities we serve.

Part 1 of "The Planner's Paycheck" reviewed how local governments currently fund planning and highlighted some of the warning signs we've already seen through the first half of 2025. In Part 2, we'll take a closer look at three previous shocks to the profession and explore this past as our prologue.

Setting the Stage

In the first half of the 20th century, the planning profession was primarily the domain of private-sector consultants. By 1930, most states had adopted their version of the Standard State Planning and Zoning Acts, and many cities had established volunteer planning commissions and zoning boards. However, local officials typically outsourced the drafting of plans and zoning codes and seldom appointed trained or experienced planners to serve as zoning administrators. This status quo held until President Eisenhower signed the Housing Act of 1954.

Planners often learn about this act as the law that introduced the term "urban renewal." But it was Section 701 of this act that mainstreamed planning as a standing function of local government. Section 701 grants offered direct funding for comprehensive planning and led many cities, towns, and counties to hire their first full-time staff planners.

Between 1955 and 1981, Section 701 grants provided more than $1 billion (not accounting for inflation) for local planning efforts. These grants also funded some of the earliest public-sector regional planning agencies and initiatives. Furthermore, the increased demand for planners jump-started a rapid expansion of planning programs at colleges and universities. But this period of rapid professional expansion ended abruptly after Congress adopted the Omnibus Budget Reconciliation Act of 1981.

The New Federalism Under Reagan

The first Reagan administration's embrace of the New Federalism had a profound impact on local planning. President Reagan had campaigned on the idea that government, especially the federal government, was the problem and not the solution for various issues facing the country. His administration championed a vision for shrinking the federal government and devolving more responsibility to states. While Reagan did not fully succeed in implementing this vision, the Omnibus Budget Reconciliation Act of 1981, which established the federal budget for FY1982, was a major victory. This budget bill slashed domestic spending by $140 billion and eliminated the Section 701 grant program.

This meant that states and local jurisdictions largely had to go it alone when it came to planning. Some cities tried to soldier on, using Community Development Block Grant funds to partially fill the gap, but many other communities effectively mothballed their long-range planning function and focused their efforts on stimulating nonresidential development. Consequently, planners were increasingly expected to pay their way with regulatory fees, making them extremely vulnerable to real estate boom-and-bust cycles.

The Long Tail of the Great Recession

This vulnerability came to the fore following the Great Recession of 2007–2009. Foreclosures and a huge pull-back in consumer spending in the wake of the housing market collapse hit local governments hard. Some already struggling cities, like Detroit, went into financial receivership. And many local governments entered a long period of fiscal austerity.

But local government layoffs didn't happen immediately. It took a while for private market damage to translate into reduced local tax revenues and sustained job cuts. Local government planning employment, which had been on an upswing in the years leading up to the recession, peaked at 25,760 in 2009, according to the Bureau of Labor Statistics, before declining year over year through 2014.

While federal relief to state and local governments through the American Recovery and Reinvestment Act prevented some planning job losses, in many parts of the country, planners contended with a greater dependence on local fees and excise taxes to pay for planning positions. This was a trying time for planners and could have been a longstanding crisis for the profession.

However, new federal programs and initiatives, like the Sustainable Communities Initiative, opened up opportunities for more integrated regional planning, allowing planners to forge cross-sectoral, regional relationships and advance critical priorities related to greenhouse gas emission reductions, transit-oriented development, and housing choice and affordability. And many private foundations expressed a new or renewed interest in community capacity building and grassroots planning initiatives.

In 2018, local government planning employment finally surpassed 2009 levels. And job growth continued through 2019. Then, of course, the world changed.

The COVID Crash

In 2020, the initial response to the COVID-19 pandemic caused a global economic recession. Stay-at-home orders closed offices, stores, and factories, and the travel and hospitality industries cratered. Local governments faced massive projected revenue shortfalls. Many communities struggled to balance their budgets in 2020, and some planners got furloughed or laid off. However, payments to state and local governments through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 and even more so through the America Rescue Plan Act (ARPA) in 2021 staved off the worst of these effects.

The COVID crash is an ongoing story. Commercial real estate vacancies are still much higher than they were in 2019, transit ridership is still down significantly in most areas of the country, and many communities know they'll need to find new sources of revenue to compensate for the end of ARPA funds. These lingering challenges may compound the effects of further federal funding cuts or other economic headwinds.

Where We Are Now

This past is the prelude to our status quo. In many communities, planners still largely depend on regulatory fees to pay their salaries. And any protracted slowdown in development applications means their job is at risk. Furthermore, some contemporary commentators have noted that the current shifts in federal policy amount to a redistribution of responsibilities among federal, state, and local agencies, one with clear echoes of the early 1980s. For example, the Trump administration has already cut funding for hazard mitigation planning and is openly exploring devolving its hazard mitigation responsibilities to the states.

What's Next

So, where might we go from here? Local planners cannot rely on property taxes to make up for other revenue losses. This means that the path forward for planning will require experimentation and adaptation. In Part 3 of "The Planner's Paycheck," we'll share some tips to help you get a better handle on how your position is funded, and we'll begin exploring opportunities to diversify funding sources and build resilience to political turmoil and economic uncertainty.

Top image: carstenbrandt / iStock Unreleased