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The American Review of Public Administration, Vol. 35, No. 3, 236-255 (2005)
DOI: 10.1177/0275074005277435

Someone to Watch Over me

State Monitoring of Local Fiscal Conditions

Philip Kloha

Michigan State University

Carol S. Weissert

Florida State University

Robert Kleine

Although the fiscal condition of local governments has been a recent concern for some states, there is considerable ambiguity about what constitutes fiscal difficulties and how to recognize them before they become fiscal emergencies. This article outlines the results of a 50-state survey to identify and classify indicators states use to assess or monitor fiscal conditions in their local governments. The survey revealed that most states did not have such indicators in place, and those that do rarely agree on which indicators to construct. Only 15 states have in place indicators to assess or monitor local financial conditions, and many of these states use indicators that do not identify local problems before they become major. Most indicators used by states are based on operating position variables such as fund balances and are predicated on the assumption that local financial emergencies are management problems rather than the result of longer term trends.

Key Words: fiscal indicators • financial emergencies • state oversight


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