Step 8: Long-Term Treatments

Step 8: Long-Term Treatments


Longer-term treatments are intended to address the fundamental causes of fiscal distress. Consequently, it is important to conduct a thorough diagnosis before selecting the appropriate long-term treatments. The skill of the diagnostician is essential. Although two governments may share the same basic cause of financial distress, the best treatment may be different for each.

Be aware that long-term treatments are not intended to produce big results in the short-term. If you need immediate help, consider fiscal first aid instead.

This section of the site presents long-term treatments from two perspectives:

  • The first lists potential treatments according to major treatment topics. This section provides an overview of the major treatments most governments will need to consider.
  • The second parallels Stage 6: Detailed Diagnosis. It lists the same causes, and describes potential treatments for each cause.

Throughout, references are often provided to magazine articles, GFOA Best Practices, or other more detailed resources on a given treatment. If you need more information on how to gain commitment to any type of long-term financial strategy please consult this article (provided courtesy of Public Sector Digest).

Treatments by Cause of Distress




Category 1: Political / Internal


  • Governance
  • Excessive Personnel Costs
  • Past Awards of Unsustainable Retirement Benefits
  • Poor Morale and Commitment
  • Overexpansion


Category 2: Internal, Economical / Technical


  • Budget Development Practices
  • Management Practices and Skills
  • Lack of Innovation and Adaptability
  • Poor Performance
  • Poor Task-Related Communication
  • Ineffective Management Information Systems
  • Failure to Fund and Manage Retirement Benefits Prudently
  • Deteriorating Infrastructure


Category 3: External, Political


  • Public Unwillingness to Pay Taxes
  • Relational Community
  • Demonstrated Trust and Citizen Engagement
  • Performance-Based Trust and Citizen Engagement
  • Socio-Geographic Community: Neighborhood
  • Decline in Intergovernmental Revenue
  • Ineffective Communication with the Public
  • Citizen Survey
  • Interest Groups
  • Decline in Local Fiscal Authority
  • Unfunded Mandates
  • Reduced Demand for Service


Category 4: External, Economical / Technical


  • Economic Recession
  • Change in Base of the Local Economy
  • Shifting Demographics
  • Pension Investment Losses Require Catch-Up Contributions
  • Inflation