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.
Source: Government Finance Review, Vol. 30 no. 3, June 2020
Pension obligation bonds (POBs) are taxable bonds that some state and local governments have issued as part of an overall strategy to fund the unfunded portion of their pension liabilities by creating debt. When economic times are bad, governments sometimes consider issuing POBs to reduce their fiscal stress, but the practice is controversial. The use of POBs rests on the assumption that the bond proceeds, when invested with pension assets in higheryielding asset classes, will be able to achieve a rate of return that is greater than the interest rate owed over the term of the bonds. However, POBs involve considerable investment risk, making this goal very speculative.
For these reasons, GFOA President and Hanover County Public Schools Assistant Superintendent for Business and Operations Terry Stone sticks with GFOA’s position that state and local governments should not issue POBs. On the other hand, Girard Miller, former chief investment officer of the Orange County Employees Retirement System with a career in public finance spanning 30+ years, suggests that, at certain times and under certain economic circumstances, a pension fund can reasonably consider POBs as part of its overall strategy.
Source: Rob Roque and Elizabeth Fu, Government Finance Review, Vol. 30 no. 3, June 2020
While some state and local governments have allowed employees to work remotely for years, many are now being thrust into a remote work environment as a result of COVID-19 response. Employees who are used to easy access to physical resources are now faced with make-shift operations at home. These rapid transitions to remote work are proving their own challenges to public sector operations and technology requirements.
The following are key considerations for governments when supporting remote workers. Items were selected based on general public sector requirements. Consider your organization’s unique situations to establish a complete list of your own.
Source: Shayne C. Kavanagh and Joseph P. Casey, Government Finance Review, Vol. 30 no. 3, June 2020
Cash is king during a financial crisis. How can local governments ensure they have enough cash on hand during this period, and what actions can they take to protect and rebalance the budget to adapt quickly?
Source: Michael A. Pagano and Christina K. McFarland, Government Finance Review, Vol. 30 no. 3, June 2020
State and local government budgets are affected both sooner and later by the economy. It’s up to elected and appointed officials to balance the service-delivery demands and needs of residents with their governments’ capacity to cover the costs of these services. How can government leaders prepare for the economic uncertainty and fiscal strife that has already begun? This article discusses revenue volatility, including some of the ways in which widespread unemployment will likely affect metropolitan areas, and what history teaches us about the challenges of fiscal rebound and the possible effects on spending, revenue shortfall, and rainy day fund balances.
Source: Government Finance Review, 2020
GFOA has developed a number of Fiscal First Aid resources to help organizations through the fiscal crisis. The centerpiece is a 12-step process to guide local governments through the initial diagnostic, treatment, and recovery phases of financial distress. Other resources include new research, webinars, podcasts, and more.
Source: Government Finance Review, 2020
The resources in this center reflect the latest guidance and materials on the recently enacted laws passed in response to the coronavirus pandemic. The programs and funding were included in the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Given the fluid nature in the release of guidance and implementation of the various programs.
Source: John T. Addison, Liwen Chen, Orgul D. Ozturk, ILR Review, Volume 73 Issue 3, May 2020
From the abstract:
The authors deploy a measure of occupational mismatch based on the discrepancy between the portfolio of skills required by an occupation and the array of abilities possessed by the worker for learning those skills. Using data from the Occupational Information Network (O*NET) and the 1979 and 1997 National Longitudinal Survey of Youth (NLSY79 and NLSY97), they report distinct gender differences in match quality and changes in match quality over the course of careers. They also show that a substantial portion of the gender wage gap stems from match quality differences among the college educated. College-educated females show a significantly greater likelihood of mismatch than do males. Moreover, individuals with children and those in more flexible occupations tend to experience a larger degree of mismatch. Cohort effects are also evident in the data: College-educated males of the younger cohort (NLSY97) are worse off in terms of match quality compared to the older cohort (NLSY79), even as the younger cohort of women is doing better on average.
Source: Ian Burn, ILR Review, Volume 73 Issue 3, May 2020
From the abstract:
This article estimates the empirical relationship between prejudicial attitudes toward homosexuality and the wages of gay men in the United States. It combines data on prejudicial attitudes toward homosexuality from the General Social Survey with data on wages from the U.S. Decennial Censuses and American Community Surveys—both aggregated to the state level. The author finds that a one standard deviation increase in the share of individuals in a state who are prejudiced toward homosexuals is correlated with a decrease in the wages of gay men of between 2.7% and 4.0%. The results also suggest that the prejudice of managers is responsible for this correlation. The author finds that a one standard deviation increase in the share of the managers in a state who are prejudiced toward homosexuals is associated with a 1.9% decrease in the wages of gay men. The author finds no evidence that the wage penalty for gay men is correlated with the prejudice of customers or co-workers.
Source: Christopher S. Carpenter, Samuel T. Eppink, Gilbert Gonzales, Volume 73 Issue 3, May 2020
From the abstract:
This article provides the first large-scale evidence on transgender status, gender identity, and socioeconomic outcomes in the United States, using representative data from 35 states in the Behavioral Risk Factor Surveillance System (BRFSS), which asked identical questions about transgender status and gender identity during at least one year from 2014 to 2017. More than 2,100 respondents, aged 18 to 64 years, identified as transgender. Individuals who identify as transgender are significantly less likely to be college educated and less likely to identify as heterosexual than are individuals who do not identify as transgender. Controlling for these and other observed characteristics, transgender individuals have significantly lower employment rates, lower household incomes, higher poverty rates, and worse self-rated health compared to otherwise similar men who are not transgender.