University of Michigan Gateway Ford School

Local Government Fiscal Health: Comparing Self-Assessments to Conventional Measures

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October 2019

Stephanie Leiser and Sarah Mills, University of Michigan

Abstract

Municipal fiscal condition is typically assessed using objective financial indicators, but little is understood about how local officials subjectively evaluate their own fiscal health. Using both qualitative and quantitative approaches to analyze survey data from Michigan, we explore how local officials conceptualize fiscal health and compare self-assessments with conventional financial indicators. The results reveal that local officials emphasize long-run issues and external stressors, but the relative importance of different factors varies depending on whether they report high or low fiscal stress. We suggest that self-assessments may be a useful supplement to conventional objective measures in capturing “true” fiscal health.

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