A new paper from ICMA, the International City/County Management Association, finds that local governments throughout the nation are dealing with the ongoing effects of the economic recession and have moved past a “business as usual” approach to cutting costs and improving efficiency. As a result, America's cities, towns, and counties are poised to find ways to reinvent themselves now that the most commonly used measures have been adopted and implemented.

Coping with Crisis: How Are Local Governments Reinventing Themselves in the Wake of the Great Recession?, by Carl W. Stenberg, a professor of public administration and government at the School of Government, University of North Carolina at Chapel Hill and prepared for ICMA’s Governmental Affairs and Policy Committee examines a range of strategies considered by local governments using keywords and reviewing 246 stories summarized in ICMA’s News Briefing between April 15, 2009 and April 15, 2011.

According to Stenberg, “At this juncture, the political risks involved in taking bold actions, such as core service elimination; expanded interjurisdictional and intersectoral partnerships; and jurisdictional realignment appear to outweigh the perceived rewards. It is likely that as the effects of state budget cuts, reductions in federal discretionary grant-in-aid programs, and property tax revaluations take effect, many managers and elected officials will need to “think the unthinkable” about strategies relative to their service delivery priorities and intergovernmental relationships.”

The white paper highlights the following:

• Local government strategies by the numbers: Overall, 96 of the ICMA News Briefing stories highlighted local government strategies that dealt with personnel; 85 with core services and programs; 41 with service partnerships; and 24 with restructuring.

• The majority of proposals were aimed at cutting expenditures rather than raising revenue.

• Elected officials are examining the provision of core local services but remain reluctant to enter into collaborative arrangements with other jurisdictions or private service providers. Local elected officials and staff are redefining core local services and indicating a willingness to cut back on what were once considered “sacred cow” departments and functions.

• Most of the responses collected were conventional and incremental as opposed to bolder, innovative strategies, though this could change in the coming years. Twelve states experiencing considerable fiscal stress in recent years—Arizona, California, Florida, Georgia, Illinois, Maryland, Michigan, Nevada, New Jersey, New York, North Carolina, and Ohio—accounted for about two-thirds of the cases reported in this research.

Looking forward, policies, programs, and practices which during better economic times would not have been on the agenda or chopping block, are now being considered. These includes expanded outsourcing; cutbacks or elimination of personnel and functions; consolidation of public agencies, services, or local jurisdictions. 

According to Stenberg, if forced to cope with the next wave of economic crisis, local government leaders should explore three pragmatic steps:

• Build on existing informal ties between elected officials and professionals in neighboring communities. This would allow for the expansion of services delivered in whole or in part through interlocal contracts and joint service agreements and could yield greater economies of scale and efficiencies.

• Especially fiscally hard-hit communities could consider moving beyond service-sharing arrangements to functional transfer or consolidation. Local officials could maintain service levels and contain or reduce costs by both “thinking regionally and acting regionally.”

• Relationships between local and state governments could become more critical to successfully coping with economic crisis. Investing time in building or rebuilding relationships with the legislature and executive branch and in identifying partnership opportunities could prove to be worthwhile intergovernmental liaison tasks for both managers and elected officials.

Read the entire paper here: Coping with Crisis:  How are Local Governments Reinventing Themselves in the Wake of the Great Recession?