Entering 2026, city governments in Indonesia will face fiscal challenges triggered by cuts in Regional Financial Transfer (TKD) funds in the 2026 Draft State Budget, which will decrease by 24.66% to Rp693 trillion from the previous figure of Rp919.87 trillion in 2025.

Although during discussions with the House of Representatives, an additional Rp43 trillion was added to the government's initial proposal of only Rp650 trillion, this additional amount is not considered sufficient to significantly close the gap in regional budget constraints.

In response to this difficult situation, the Chair of Apeksi and Mayor of Surabaya, Eri Cahyadi, invited 98 mayors who are members of Apeksi to collaborate and think creatively in order to optimize the potential of their regions to generate local revenue (PAD) and reduce dependence on TKD.

With the optimization of local revenue, it is hoped that city governments can strengthen their fiscal independence and remain capable of implementing their development agendas even as budgetary support from the central government declines.