Forecast pessimistic and optimistic scenarios for three, six and twelve months
A forecast makes estimates on future scenarios based on past, current, and projected information. Given the unprecedented nature of the pandemic, it is hard to use past information or the usual assumptions to perform forecasting. Using pessimistic and optimistic assumptions for different timeframes and updating them regularly can provide an upper and lower bound for forecasting.
ASSESSMENT
Some questions to guide your thinking
- What assumptions is your city making about future events?
- What are the best and worst-case assumptions the city can reasonably make?
- Which assumptions are confirmed and which ones are refuted over time?
Video
Visualizing and strategizing financial scenario planning for uncertain times
Government Finance Officers Association (GFOA) 1 hour
In this webinar, three practitioners discuss how scenario planning can help city leaders develop a variety of policy responses as the pandemic unfolds.
Video
Updating forecasting models
MSRC 40 min
This webinar discusses many of the issues local governments are likely to face in the coming weeks while dealing with the pandemic.
13
Updating your model
16
Forecasting revenues
37
Forecasting expenditures
Reading
Understanding the fiscal impact of the pandemic recession
National League of Cities (NLC) 30 minutes
This report analyzes finance data from the US Census Bureau and unemployment projections from the Congressional Budget Office and proposes a framework for the analysis of budget shortfalls encompassing revenue responsiveness and economic conditions.
- Nearly all cities, towns, and villages will experience revenue shortfalls in 2021.
- The magnitude of the shortfalls will depend on the underlying fiscal structure
- Pages 9-11 contain the main estimates by state.
Reading
Understanding the challenges and opportunities of budgeting during COVID-19
Bloomberg Harvard City Leadership Initiative (BHCLI) 10 minutes
This handout describes an approach to budgeting during the pandemic recession that relies on re-imagining the city budget. Cities should be aware of the limitations they face, including lack of coordination at other government levels and the inability to use traditional revenue sources.
- Leaders must plan for best-guess and worst-case scenarios, update those scenarios, and adjust accordingly.
VIDEO
Visualizing and strategizing financial scenario planning for uncertain times
In this webinar, three practitioners discuss how scenario planning can help city …
VIDEO
Updating forecasting models
This webinar discusses many of the issues local governments are likely to face in …
Reading
Understanding the fiscal impact of the pandemic recession
This report analyzes finance data from the US Census Bureau and unemployment …
Reading
Understanding the challenges and opportunities of budgeting during COVID-19
This handout describes an approach to budgeting during the pandemic recession that …