Like many communities, you have finished the painstaking process of finalizing your budget for 2020. The fiscal challenges of rising costs and property tax losses due to the circuit breaker tax caps have resulted in difficult budget decisions for many communities and schools across the State. You may have cut your budget to the bare bones only to find out from the Department of Local Government Finance that you will be required to make additional cuts for 2020.
Unfortunately revenue growth is not keeping up with the increasing costs of providing services and therefore, it is increasingly more difficult for communities to improve or even maintain the service level they currently provide to its citizens. It is also more difficult to evaluate the future needs of your community by just looking at a one year budget. By extending your planning horizon beyond one year and taking a more comprehensive approach, you can develop long-term cash flow projections to identify potential budget deficits and cash flow shortages before they occur. A long-term financial plan can also provide you with a strategic plan to assist your community with funding other priorities, such as capital projects, over the next several years.
Now that your 2020 budget is adopted, it is a perfect opportunity to use it as a basis to start planning for 2021 and beyond.
If you have any questions about developing a comprehensive long-term financial plan or need assistance with reviewing and analyzing your budget, please contact our team.