Budgeting and Forecasting

The Fiscal Cliff

Image from GFR

Over the summer of 2023, the fiscal status of local governments and states appeared to be in reasonably good condition. Property values—especially for homes—were strong, so property taxes were holding up well, according to Farhad Omeyr, program director of research and data for the National League of Cities. And “to my surprise,” he said, “we weren’t seeing a plateauing of sales taxes.” Meanwhile, local governments were accumulating money in their rainy-day funds, at the same time, as inflation appeared to be slowing. There was growing hope that the economy, as a whole, might be heading for that much-hoped-for “soft landing.” That’s the good news. But don’t count on it lasting forever. A series of stresses and strains on towns, cities, and counties are unquestionably heading our way.

  • Publication date: October 2023
  • Authors: Katherine Barrett and Richard Greene