Fiscal Stress

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  • There is no generally accepted definition for this term. In its broadest terms, fiscal stress can mean the inability of a government to meet the demand for public goods and services. Another measure assesses a government's ability to maintain structural balance, that is, to be able to pay for recurring expenditures with recurring revenues. A government that is unable to maintain structural balance would be defined as fiscally stressed. Another alternative is to define a fiscally stressed government as one that exhibits a consistently negative financial position, a low current ratio, declining per capita general fund balances, and increasing current and long-term liabilities compared with operating revenues.


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