Cities, towns, and counties throughout the United States face the deepest and most severe economic downturn in 50 years. For the first time in the postwar era, the crisis has dramatically affected all levels of government, and extraordinary action is required to maintain critical public services in the face of dwindling revenues.

A new report, Navigating the Fiscal Crisis: Tested Strategies for Local Government Leaders, analyzes previous recessions and highlights the actions local governments have taken to alleviate such crises in the past. Commissioned by ICMA, the organization that advances professional local government management worldwide; and developed by researchers at the Alliance for Innovation (a partnership of ICMA, the Innovation Groups, and Arizona State University), the report explains how many jurisdictions achieve excellence in the face of adversity and identifies strategies local leaders can use to navigate the current challenge and turn crisis into opportunity.

Navigating the Fiscal Crisis examines five key questions concerning local government’s role in the current economic situation:

1. What are the dimensions of the current crisis? What defines it?
2. What has worked for local governments during previous fiscal cutbacks?
3. What characterizes organizations that cope best with fiscal stress?
4. Why is innovation critical in hard times and how can positive action be taken?
5. How can local government action contribute to the economic recovery?

“The research summarized in Navigating the Fiscal Crisis puts valuable ammunition in the hands of local governments during a time of unprecedented challenge,” said ICMA Executive Director Robert J. O’Neill, Jr.  “Jurisdictions are experiencing the current recession differently, with some parts of the country already implementing mitigation strategies while others are only beginning to feel the impact.  This report will help local governments address this issue proactively regardless of where they are on the continuum.” O'Neill stressed that the Alliance will continue to collect data on the crisis and responses from local governments through an ongoing Wiki and a series of regional meetings throughout 2009.

Navigating the Fiscal Crisis summarizes the new challenges local government leaders face in dealing with the current fiscal crisis and offers a series of guiding principles for action.  Representatives from ICMA and the Alliance for Innovation discussed the report findings during a news event on Monday, January 26, at the College of Public Programs on the Arizona State University Downtown Phoenix campus.

To underscore the importance of providing direct funding to local governments, greater access to capital markets, and assistance to individuals as part of the economic stimulus package, ICMA, the National League of Cities, and the National Association of Counties presented a white paper, Local Governments’ Vital Role in National Economic Recovery, to the Obama Presidential Transition Team in December. Click here to download a copy of that paper.