The “New Normal” for Local Government“新常态”地方政府.pptVIP

The “New Normal” for Local Government Lawrence L. Martin, Ph.D. Richard Levey, M.S. Jenna Cawley, M.A. Introduction Bursting of the housing bubble, banking crisis and economic recession have altered the landscape for local governments Economic conditions have ushered in a “new normal” for local government finance, services and employment: - fewer resources - smaller workforces - new ways of delivering services Economic recession is considered a “break point,” whereby reforms implemented now are likely to last long after the economy recovers Major Arguments in Favor of a New Normal for Local Government Globalization The global marketplace has altered the role and importance of government. Capital and jobs are moved with ease Destabilization of jobs and communities Reform was overdue Local governments have used the great recession to implement “long overdue” reforms. Revisiting generous benefits packages, such as pension plans and Reexamining collective bargaining agreements Local Government Finances Revenues Housing bubble burst resulted in massive reductions in property tax revenues Income and sales tax revenues are down as well State and federal governments have decreased aid Local Government Finances Expenditures Local government expenditures were growing at unsustainable rates prior to the economic recession Demographic changes have contributed to an increase in healthcare related services States shifting costs and service obligations to local governments Research suggests that cutting expenditures, on its own, is not enough to reconcile budget shortfalls Local Government Finances Pension, Sick Leave Health Care Obligations Public sector employee benefits have typically been more generous than private Pension obligations are currently estimated to be underfunded by $1.3 to $3 trillion. GAO estimates unfunded state and local government health care obligations at $530 billion. Local Government Finances Debt - Loc