A Balanced View: Us Local Government Managers’ Perceptions of Fiscal Stress

Abstract

Fiscal stress among local governments in the US has become a key concern since the 2008 Recession. Fiscal stress is fueled by structural pressures from demography, economy, and state policy. How do these pressures shape perceptions of fiscal stress? We conducted a national survey in 2017 of 2,064 US local governments. Our regression models measure the factors that differentiate perceptions of fiscal stress among local government leaders. We find governments with professional managers perceive higher stress. These perceptual measures reflect not only higher objective financial measures, such as debt per capita, but also structural factors like aging infrastructure, unemployment, education levels, and state policy. Professional managers take a broader view of fiscal stress – not just short-term financial concerns, but longer-term structural shifts in demography, economy, and state policy. Greater autonomy allows US local governments to have a more balanced view on fiscal stress and, by practicing pragmatic municipalism, to hold back the tides of austerity.