There is a spectrum of recession predictions among leading economists. Yet, the majority typically agree on a rising probability that the U.S. economy will shrink in 2023 and that the chance of a recession is “uncomfortably high.” For local governments, a recession could negatively impact funding sources, budgets, and staffing. As a result, leaders need to start strategizing how to safeguard their operations before the next economic downturn.
What Could a 2023 Recession Mean for Local Governments?
Reflecting on lessons learned from the Great Recession of 2008, if the nation’s economy shrinks in 2023, the impacts on local government funding could be significant and might include:
- Cuts in property tax revenues due to declining house values
- Cuts in state and federal aid that are necessitated by declining revenues, primarily from sales and income taxes
- Instability in the municipal bond market that is critical to public infrastructure financing
With less funding available at the municipal level, departments could be asked to cut spending and dip into their financial reserves in the short term. As a result, it might be years before they return to prerecession revenue and spending levels. They could also face hiring freezes and declining employment.
For entities that are already budget- and resource-strapped, the likelihood of an even more significant tightening of funds and personnel means leaders need to strategize how to recession-proof their operations to ensure they can continue conducting business and serving residents regardless of recession realities.
The Budget Spending Paradox
What do people inherently do when they are low on cash? They spend less. It is a logical response. If you have less, you must spend less. That theory works when spending is on frivolous nice-to-haves, but what does one do when their need for necessities is great and their funds are low?
This clash defines the challenge facing local governments trying to maintain business continuity with a recession likely on the horizon. If there was a lesson learned from the COVID-19 pandemic, it is the need for digital transformation and the scalable efficiencies that come from enabling resident self-service online and leveraging automated workflows to foster inter-departmental collaboration.
Drawing on these digital transformation lessons, the local governments that will be best capable of navigating an economic recession are those that invest now in technology that can keep operations humming, regardless of shrinking staff resources. While it may seem like the ultimate paradox, by investing in new technology now, despite budget and staff restrictions, local governments can accelerate time and budget-saving activities that will ultimately protect their resident relationships and business continuity efforts.
The One Technology Investment that Can Help Recession-Proof Your Operations
Process Automation software will be a critical tech-stack addition for local governments that want to navigate a recession without the risk of detrimental declines in operational efficiency and resident service quality. Such technologies are often built using low-code technology. Low-code is a software development approach that allows for faster application development and solution launch with minimal hand-coding. It uses visual modeling in a graphical interface to build and configure applications.
Process Automation software built using low-code technologies allows staff of all technical abilities to be nimble and build workflows, forms, and integrations in-house that would otherwise require months of custom-coding, often by expensive outsourced agencies. When staff can architect custom resident self-service functionality in minutes, they remain adaptable and capable of addressing evolving market needs regardless of budget and staff resources.
The CivicPlus® Process Automation and Digital Services Solution
At CivicPlus, we’ve designed our Process Automation and Digital Services solution to address local governments’ challenges with limited time, staff, budgets, and engineering resources. Built with a simplified user interface, it is easy for non-technical teams to create workflows, mobile applications, and resident service interfaces and robust enough to allow for custom coding if desired.
- Create custom business solutions and mobile apps for a specific purpose or engagement
- Deploy custom staff and resident-facing progressive web apps (PWA) with custom branding and design
- Eliminate inefficient paper or PDF forms for your residents and business owners
- Free-up staff time to work on high-value projects
- Reduce reliance on costly software applications that don’t fit your exact needs
- Bring the application development in-house and reduce dependence upon expensive, hard-to-manage programming vendors
For more information about our Process Automation and Digital Services solution, CivicOptimize®, take a self-guided demonstration.