The year 2024 was characterized by notable stability and optimism in public finance, as highlighted by Girard Miller in Governing. The Federal Reserve's successful efforts to tame inflation helped the U.S. economy grow at what many are calling a 'Goldilocks' rate—neither too hot nor too cold—avoiding a recession that many had feared. This economic environment fostered a sense of confidence among investors and policymakers alike. [685dadbd]
In the wake of the November 5 elections, voters in eight states approved property tax limitations, reflecting a growing concern about housing affordability and fiscal responsibility at the local level. This decision is expected to have lasting implications for public funding and local government operations. [685dadbd]
Public pension funds also saw significant benefits from the stock market's performance, with gains exceeding 45% over the past two years. This recovery has provided a much-needed boost to pension solvency, alleviating some of the financial pressures that have plagued these funds in recent years. [685dadbd]
Moreover, public-sector labor unions exhibited restraint in their pay demands, which contributed to the overall stability in state budgets. However, challenges remain as many states continue to face revenue shortfalls stemming from the COVID-19 pandemic. These shortfalls have prompted ongoing debates about financial reporting and data ownership, particularly in the context of emerging technologies like artificial intelligence. [685dadbd]
The year also saw a political backlash against Environmental, Social, and Governance (ESG) investing, as various stakeholders debated the role of these criteria in public finance and investment strategies. This backlash has raised questions about the future of ESG initiatives in the public sector and their impact on investment decisions. [685dadbd]
Overall, 2024 proved to be a better-than-average year for public financiers, with a mix of stability and challenges that will shape the landscape of public finance in the years to come. As the economy continues to evolve, stakeholders will need to navigate these complexities while striving for transparency and accountability in financial reporting. [685dadbd]