Recession-Proof Budgeting For Cities? Think Resilience, Experts Say

Nov 28, 2016


A look down Penn Avenue in Pittsburgh.
Credit Jessica Kourkounis / Keystone Crossroads

It might seem like some cities only just stopped reeling from the last recession. Now many officials want to prepare for the next economic downturn.

An expert panel offered some insight recently at the National League of Cities summit in Pittsburgh.

One way to prepare is through something called stress testing — basically, financial modeling to help governments budget resiliently.

"We provide alternative economic scenarios to say: 'If we go into recession next year, this is what the Pennsylvania economy is going to look like. This is what unemployment will be, this is what disposable personal income would be,'" says Moody's Analytics Senior Economist Dan White. "And we use those factors to try and figure out exactly how much tax revenue the city or state would lose, how much Medicaid spending or other social services spending would increase."

The point is to figure out how much money to put aside to prepare for the next recession.

READ MOREKeystone Crossroads is a statewide public media initiative reporting on the challenges facing Pennsylvania's cities. WPSU is a participating station.