Sound Fiscal Management Matters

Managing Budgets

Here is a question for you. Does a municipality need to adjust to economic conditions after the yearly budget was approved?

This is an interesting question for all levels of government. In the private sector, the conservation of cash is of the utmost importance during a recession. This practice allows a private business to make tactical investments, while the business re-positioned itself in a specific market during the recession. For a business, it is important to be well positioned in the their market, as the economy leaves a recession.

For local governments, it is important to conserve cash, as tax revenues decreases, residential development stops, and local business struggle to be successful. Unlike, a private sector business,  local governments cannot make investments to create future revenue streams. The local governments revenue streams are depended upon the regional and national economy. Local governments have a limited ability to affect the broader economy.  They can create a business friendly environment by creating business tax breaks or tax free zones, but it is up to the private sector to create the future revenue streams.

Saving our pennies!

As inflation increase, our disposable income is declining. The job market is not growing as the economy  continues to falter and job loss mounts.  Nationally and locally, we are in a recession with escalating job losses and further reductions in housing prices.

So what does all this mean? We need to watch our pennies and conserve cash. As our revenue streams decrease, we need to reduce our capital expenditures in-year!  in reality, this means we need to postpone new capital projects, including new buildings until our economy recovers from the recession.

If you have any ideas or comments about critical issues facing Forks Township, please share your ideas via our blog or email at d.bilings@att.net.

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