Financial Resilience: Virginia and Beyond

VIA SliderPublic schools. Police and fire services. Trash pickup. Water and sewer. Road construction and maintenance. Many of the services we associate with government—and which are basic to our everyday quality of life—are delivered at the local and state level. But state and local governments today are struggling to provide these critical services with far fewer resources than in the past.

The bursting of the housing bubble in 2007 and the ensuing Great Recession hit state and local governments hard. Falling property values and high unemployment made state and local tax revenues plunge, while federal and state cutbacks in local aid further eroded local resources. Even after the recession officially ended in 2011, local property tax revenues continued to fall for several years.

Many local governments tried to ride out the storm by enacting short-term measures—deferring maintenance, taking on debt, or spending down reserves—but the extended severity and duration of the Great Recession made these tactics untenable. Services were cut and employees laid off. As the years wore on with no relief in sight, many local governments found themselves confronting dire financial circumstances.

State and local government leaders needed a new way to prepare their organizations for unexpected challenges. The concept of resilience—the ability to recover quickly from difficulty or change—was increasingly explored as a new way of doing government business. Financial resiliency encourages organizations to diversify risks, increase accountability, innovate and evolve, and think broadly about what factors influence financial health. It can be implemented across the landscape of local government finance functions, from budgeting and planning, to risk management, to leadership.

In the latest issue of Virginia Issues and Answers, SPIA’s magazine informing policymaking in the Commonwealth, experts and practitioners share basic concepts and best practices for financial resiliency in state and local government. The lessons the authors offer can be applied in Virginia and beyond.

Financial Resilience: What it Means to the Local Government Manager
Joe Casey, County Administrator for Chesterfield County, Virginia, brings the financial resilience concept to ground level, emphasizing four key components: engaging stakeholders, earning trust, countering emotional decision-making, and deploying economic development incentives.

America’s Progress Hinges on Resilient Public Universities
Mary Sue Coleman, President of the American Association of Universities, argues that the long-term resilience of our public institutions of higher learning depends upon many sectors of society—state and federal governments, the private sector, and universities themselves—taking aggressive action.

Enterprise Risk Management: A Key to Organizational Resilience and Self-Defense
Enterprise Risk Management (ERM) frees up the flow of information within an organization to help leaders anticipate and prepare for strategic, “big picture” risks. Tom Stanton of Johns Hopkins University discusses the strengths of and basic steps for implementing ERM.

Making Capital Funding Reasonable, Stable, and Sustainable in Orange County, Virginia
Orange County, Virginia, deferred maintenance for so long during the Great Recession that it was eventually forced to use emergency funds to replace an ambulance. Assistant County Administrator for Finance & Management Services Glenda Bradley explains how the county implemented Capital Improvement Planning to anticipate capital expenditures over the long term.

Director’s Experience Building Resiliency in Local Government Informs Graduate Certificate Programs at SPIA
Stephanie Davis, Director of SPIA’s Graduate Certificate in Public and Non-Profit Financial Management, describes how she implemented financial resilience principles as a county Finance Director, and how SPIA’s certificate program teaches these concepts to students.

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2017-03-29T10:48:29+00:00