Balancing the Budget in Bad Times

Source: Shayne Kavanagh, Government Finance Review, Vol. 30 no. 4, August 2020

The June 2020 issue of Government Finance Review featured resources for local governments navigating the economic crisis resulting from the COVID-19 pandemic. These included an overview of retrenchment techniques and opportunities to access more cash (“Cash is King”)—early steps in GFOA’s 12 steps to recover from financial distress.

This article takes a close look at Near-Term Treatments, which build on the concepts introduced in the first four steps of the recovery process. Near-Term Treatments are the next level of treatment for the ensuing 12 to 18 months. They might be enough to resolve minor cases of financial distress. For severe cases, the Near-Term Treatments buy time for extensive changes, such as those suggested in Step 8, Long-Term Treatments.