Topics: COVID-19, Research

December 9, 2020

Muncie, Indiana library

Many local Indiana governments are anticipating cuts to services because of the impact of COVID-19 on local government budgets, says a new report from Ball State University.

COVID-19 Response: Community Resiliency in the Hoosier State—Fiscal Impacts on Local Government,” a study of more than 100 state and local officials around the state, finds that these units are enacting traditional cutback management measures to balance budgets.

“These budget cuts and pandemic-related safety measures have already impacted the quality of some local government services such as parks and recreation, library and cultural services, issuing permits, collecting payments, or conducting court operations,” said Charles Taylor, managing director of the Bowen Center for Public Affairs at Ball State. “These have been the impacts in the first few months of the pandemic. The longer the pandemic and its economic effects persist, the greater these impacts are likely to be on local governments.”

Taylor co-authored the report with Dagney Faulk, research director for the University’s Center for Business and Economic Research (CBER), and staff from Ball State’s Indiana Communities Institute. The study was conducted with assistance from Accelerate Indiana Municipalities and the Association of Indiana Counties.

Faulk said the results of the study reflect local governments pursuing common approaches to forced budget cuts in which public safety services are deemed more essential than others.

“Maintenance can be deferred, and services related to economic development are largely protected,” Faulk said. “The services most likely to be cut—and to suffer major cuts—were those that might be considered less essential such as parks and recreation, library and cultural programs, or maintenance that can be deferred (streets and roads, buildings and facilities, or groundskeeping).”

The most common approach to making these cuts is to postpone or cancel planned major expenditures, including capital projects.

The study also found the next most common approach is canceling or postponing hiring to fill current or future vacancies. Relatively few local officials reported plans to furlough or layoff current employees. If forced to do so, then part-time and temporary employees are at greater risk of cuts than full-time staff members.