Texas Cities show mixed results in national city management rankings

Four Lone Star State municipalities crack top 50 in WalletHub’s annual assessment of best-run cities

Texas cities delivered a mixed performance in WalletHub’s 2025 ranking of America’s best- and worst-run cities, with several major metropolitan areas struggling despite the state’s reputation for business-friendly governance.

Only four Texas cities landed in the top 50 of the financial website’s annual study, which evaluated 148 of the nation’s most populous cities across six key categories: financial stability, education, health, safety, economy and infrastructure.

Arlington led Texas cities at No. 44 overall, followed by Austin at No. 45, Lubbock at No. 38, and El Paso at No. 53. The rankings measured how effectively city governments provide services relative to their per-capita budgets.

Several major Texas metropolitan areas fared poorly in the assessment. Dallas ranked 95th, Houston came in at 113th, and San Antonio placed 64th. Fort Worth ranked 55th.

“The best-run cities in America use their budgets most effectively to provide high-quality financial security, education, health, safety and transportation to their residents,” said Chip Lupo, a WalletHub analyst.

Key Challenges Mirror National Trends

The results reflect broader challenges facing American cities, according to experts in municipal governance and economic development.

Don Vaughan, an adjunct professor of state and local government at Wake Forest University School of Law and former North Carolina state senator, identified affordable housing, public education improvements and infrastructure upgrades as the most pressing issues confronting cities nationwide.

“The challenge for our cities is to provide for adequate and quality housing for the thousands of workers coming into our state, as well as the need for quality public education for the families of these workers,” said Vaughan, who served seven terms on the Greensboro, North Carolina, city council.

Those challenges resonate across Texas, where rapid population growth has strained municipal resources and driven up housing costs in major metropolitan areas.

Economic Performance Key to City Success

Chad R. Miller, a professor of economic development at the University of Southern Mississippi, said attracting and retaining talent represents the most critical issue confronting American cities today.

“The cities with the most talent will create jobs, prosperity and improve the tax base,” Miller said. “Businesses and other talented people will in turn be attracted creating a virtuous cycle.”

Miller evaluates communities using five key indicators: five-year job growth, median income growth, population growth, labor participation rates and education levels — metrics that align closely with several categories in the WalletHub study.

Austin Excels Despite High Spending

Austin, despite its No. 45 overall ranking, excelled in service quality, placing sixth nationally in the “Quality of City Services” category. However, the capital city’s high per-capita budget of $3,242 — ranking 84th out of 148 cities — dragged down its efficiency score.

The study’s methodology divided each city’s service quality score by its total budget per capita to create a “Score per Dollar Spent” index. Cities with lower budgets but adequate services ranked higher than those spending more money for similar results.

Arlington scored particularly well in financial stability, ranking 71st, while maintaining moderate budget levels. The city ranked 47th in total budget per capita at $2,107.

Lubbock demonstrated strong fiscal management, ranking 104th in service quality but 29th in budget efficiency with just $1,726 per capita in municipal spending.

El Paso showed balanced performance across categories, ranking 56th in service quality while maintaining relatively low per-capita spending at $1,980.

Major Cities Struggle With Efficiency

The study found that many Texas cities struggled with infrastructure and education metrics. Dallas ranked 112th in service quality despite significant municipal spending, while Houston placed 114th in the same category.

Vaughan noted that infrastructure improvements represent a universal challenge for American cities, even in regions with strong economic development.

“While our new interstate system is strong, local bridges and roads need to be updated to meet the demand,” he said. “Crime and adequate policing are issues in all cities.”

Miller emphasized that effective city management requires comprehensive performance measurement systems that track inputs, outputs and outcomes over time.

“From an economic development perspective, we focus on hard economic outcomes,” Miller said. “Quality-of-life and quality-of-place are crucial for economic development but are hard to measure objectively and comparatively.”

Technology Could Improve Civic Engagement

Both experts stressed the importance of citizen engagement in improving municipal performance, though they noted persistent challenges in getting residents involved in local government.

Vaughan said technological advances have created new opportunities for civic participation, but cities must do more to promote these tools.

“New technology has made it easier for citizens to participate in municipal government,” Vaughan said. “Televised public meetings and municipal interactive websites make it easier to participate. GIS mapping has improved communication with citizens.”

However, he noted that voter participation in municipal elections “remains way too low” — a challenge that could affect cities’ ability to address long-term governance issues.

Miller noted that citizen engagement must go beyond information sharing to include consultation, joint planning and collaborative action to improve government transparency and accountability.

Addressing Social Tensions

The rankings come as Texas cities, like municipalities nationwide, work to address social and racial tensions while maintaining public safety.

Vaughan, drawing from his experience in North Carolina municipal government, said building trust through open dialogue has shown progress over the past two decades.

“Policies that promote racial equality and accountability need to be strengthened,” he said. “Improving police-community relations will help bring this about.”

Miller suggested that policymakers can reduce tensions by creating more economic opportunities and responding quickly to incidents that might inflame community relations.

National Context

Provo, Utah, topped the national rankings, followed by Nampa, Idaho, and Manchester, New Hampshire. California cities dominated the bottom of the list, with San Francisco ranking last at 148th.

WalletHub’s study used 36 metrics across the six categories, with data collected through April 2025 from various federal agencies, research organizations and municipal sources. The rankings aim to help residents and policymakers understand how efficiently their local governments operate compared to peer cities nationwide.

For Texas cities, the results highlight ongoing challenges in balancing growth with fiscal responsibility while maintaining quality services for residents in one of the nation’s fastest-growing states.

The analysis suggests that while some Texas cities excel in specific areas, most face significant room for improvement in delivering efficient, effective municipal services that can support long-term economic development and quality of life.