The developing fiscal crisis that city and county governments face calls for extraordinary action by local officials at all levels of government. There are lessons to be learned, however, from research on previous downturns and what is known about how organizations achieve excellence and deal with adversity. ICMA, the International City/County Management Association, commissioned this paper by researchers in the Academic Network of the Alliance for Innovation in order to better understand the nature of this fiscal crisis and what steps managers can take to pursue economic recovery. Key findings in the research address these area.

This economic crisis is deeper and more severe than what we have experienced in the past 50 years. While some U.S. regions and localities are experiencing the downturn differently, for the first time in the postwar era, all levels of government are impacted with dramatic revenue reductions simultaneously. This economy also has all sectors of the private economy in a tailspin. Events have already reached crisis levels in some local governments, and some say that “we are just at the end of the beginning” of dealing with the crisis. Still, local governments in other parts of the country are just starting to see how the crisis will affect them. These governments can learn from past experience with cutbacks and the response of communities already on the frontlines of the crisis.