Abstract: Navigating the increasingly complex crosscurrents of local government finance has become an essential skill for today's public administrator. The convergence of rising expectations from citizens and council members, anemic growth in revenue sources, and unfunded pensions now coming due has complicated the local manager's task of preparing a budget that balances revenues with expenditures. More fundamentally, today's managers must deliver services at a time when public confidence in government and its ability to perform have reached unparalleled lows. This book examines the issues that a local manager confronts in developing a budget--both the choice of public services and projects to provide, and the choice of revenue sources used to pay for them. When formulating a budget, the manager must balance what is economically best, politically expedient, and administratively possible. Because the manager must also respond to citizens' perceptions of an issue, whatever their accuracy, this book also examines budgets in those terms. In a more general sense, effective leadership requires that the public administrator shape as well as follow public opinion. The recommendations made throughout this book are designed to enhance citizens' confidence in the responsiveness and competence of local government leaders.