The challenges of public budgeting are likely to increase in the coming years due to several emerging trends. The Pew Trusts project on “Managing Fiscal Risks” highlights ways in which state budgets and all public spending plans will face new challenges. Crafting a state budget involves estimating spending needs, predicting revenue trends, and balancing competing priorities to maintain a structurally balanced budget.
Fiscal leaders are often focused on the immediate budget cycle, making it difficult for them to consider how major shifts in the status quo could impact their state’s fiscal future. With demographic, environmental, and technological changes on the horizon, states must plan ahead and consider the potential fiscal impact of emerging risks to effectively manage future budget challenges.
The article by Peter Muller, a former non-partisan fiscal official, discusses the revenue effects of an aging population, climate-related spending needs, and cybersecurity concerns. These factors will require states to proactively plan and manage their budgets to address future challenges effectively. Visit the Pew website to read the full article.
Overall, public budgeting faces increasing challenges from emerging trends, requiring fiscal leaders to look ahead and consider potential risks to ensure effective budget management in the future.