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 12-13 contain an appendix with principal estimations 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 …

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VIDEO

Updating forecasting models

This webinar discusses many of the issues local governments are likely to face in …

icon/Link Go to link

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 …