Managing Budgets During Fiscal Stress: Lessons for Local Government Officials

Like many local governments across the nation, cities and counties in California were impacted heavily by recent economic problems. This report examines what happened to local California government revenues during this period, which services have been adjusted, how employee benefits have been treated, and what innovations have been introduced. The report is based on both a web-based survey of 245 California city government officials and face-to-face interviews with chief financial officers in most of the state’s major cities (Sacramento, San Francisco, San Jose, Oakland, Riverside, Pasadena and Los Angeles). The authors write, “There has always been much interest in the state with 12 percent of the nation’s population. The experiences of California provide lessons for local governments across the nation as they seek to manage the continuing aftershocks of the Great Recession.” The report concludes with recommendations for local governments across the nation. These include: Identify and address structural deficits in a finely grained manner, leaving no major budget category unexamined. Foster citizen engagement to encourage widespread dissemination of fiscal information in order to enhance the legitimacy of public policy choices. Improve the state/local relationship to reduce episodic, convulsive impacts on local public finance