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Task force finds no single cause for rising local reserves; COVID and conservative budgeting repeatedly cited
Summary
Members and auditors said survey responses point to multiple drivers of higher local government balances — COVID federal money that freed other revenues, conservative board budgeting, investment performance and increased self‑funding of capital projects — and asked for comparative data on population and spending to test hypotheses.
Task force members reviewed survey responses and early analysis to identify why local governments’ reserves have grown. The state auditor and several members said there is not a single clear causal factor; instead, COVID relief, conservative budgeting and stronger investment returns repeatedly emerged in comments and examples.
Tammy Hammond (State Auditor) told the group that COVID-era aid can explain part of the pattern but that the pandemic funds themselves are not the ongoing balance: “COVID can be the cause. It's just no longer the balance,” she said. Members asked staff to compare reserve trends with population and expenditure growth and to prepare revenue‑vs‑expenditure analyses to distinguish temporary federal effects from structural budgetary changes.
