Frugality is the new normal
“There will not be a return to normalcy. What we have is a new normal as a result of these economic changes.”
— Maryland Municipal League Executive Director Scott Hancock
Local government operations have changed permanently as a result of the recent financial crisis, according to a report from the Washington-based International City/County Management Association (ICMA). What that means, some city and county officials say, is that the “new normal” for governments will include more frugal budget choices and more partnerships between governments and the private sector.
Eighty percent of the more than 1,500 local governments that answered an ICMA survey reported that the financial crisis had moderately to severely affected their local government. Almost 70 percent of the respondents say that the changes they have implemented in response to the recession, such as service reductions, will continue beyond the fiscal crisis. “We know we can’t have business as usual,” says ICMA Deputy Executive Director Elizabeth Kellar. “We know we have to get a handle on some long-term issues, [such as pension funding and retiree health care.] That’s one big issue that I think every local government is thinking about right now.”
The new approach to government also will drive out inefficiencies, according to officials who joined Kellar in a September press conference to announce the survey results. Local governments will have to work with non-profit organizations and for-profit companies to eliminate duplicate services, says Decatur, Ga., City Manager Peggy Merriss. “When times were good, things could be duplicated, and that’s just simply not going to happen that I can foresee in the future.”
Inter-jurisdictional agreements, in which small local governments share services, should also become more prevalent, says Ron Carlee, Arlington County, Va., county manager. “Necessity may make partners of people who otherwise would not have done it in the past,” he says.
These strategies will have to be embraced in the future, Kellar says. “The key here is that those local government leaders who are in touch with their community and who engage the private, non-profit sector, those are the ones who are going to be best positioned to adapt quickly to the changes ahead,” she says.