Bankrupt Financial Remedies

Abstract

With redesigned budgeting processes and financial and economic analysis failing to support municipalities’ long-term financial stability, municipal officials look elsewhere. This is a welcome relief to those involved. Whether due to a numbers phobia, frustration with zero-sum alternatives, or fatigue from dry, detailed process steps—most people inside and outside the municipal organization are uneasy with any budgeting process. And these people are likewise unfulfilled by the quality of financial and economic analysis. So municipalities turn to alternative financial remedies: operational improvements; service delivery restructuring; community engagement; data access and transparency; financial health evaluations; and other approaches to achieving financial stability. As with the alternative budgeting methodologies, the failing of these conventional remedies is not that they do not take on genuine issues. Financial accountability, operational effectiveness, transparency in government, and a better method for managing municipal resources are all legitimate aims. Thus, we should not be surprised when these remedies yield some degree of success. But not every action that moves the needle positively in these areas is productive in a crisis. When municipal officials implement these remedies, they become satisfied that they have addressed the organization’s financial turmoil. So satisfied, that they refrain from digging deeper at a time when deeper digging is needed desperately.