THE FISCAL POLICY SPACE FRAMEWORK AND LOCAL GOVERNMENT BUDGETING DURING THE COVID-19 RECESSION

The COVID-19 pandemic has created a global recession unlike any other. Cities are having to develop budgets within an environment riddled with uncertainties. How should budget departments select fiscal measures to address unprecedented issues? This study examines and compares how seven cities responded to the Great Recession of 2008/2009 and budgeted for the 2020/ 2021 fiscal year. Using a framework published by the Brookings Institute, we examine how state preemption rules and a local government's economic base, to a great extent, determine budget options. The Framework posits that three primary attributes, state-local authority, a city's economic base and fiscal structure alignment, and demands of its citizens, contribute to explaining how local governments address fiscal stress. A city's tax structure should be imposed on its primary economic base. The ability for a city to be structurally aligned depends, in a large part, on the fiscal flexibility granted by the state.