Earlier quoted context omitted.
As long as the local government has tons of money doing nothing in their budget, they are going to find a way to spend it, and they're not going to care if they overpay because what else are they going to spend it on? In coastal California, the rule is never ever give that money back by lowering taxes. Taxes only go up. If there's too much money being generated by the taxes to spend, start spending it on homelessness…
What's the solution then? Utah built apartments for everyone. That seems to have worked.
Governments are completely run by monetary expenditure.
You don't spend all your budget cause you savy? Great, we'll put that money with someone else next year.
Spend all your money on junk? Great we'll give you more money next year because you clearly need it.
What needs to happen is to decouple monetary spend from incentives.
Incentivise saving money and use escape hatches to protect budgets from fluctuations (saving one year might not be recurring, this shouldn't affect your spend next year)