Impact of Covid-19 on the Financial Performance of Local Governments � Evidence From Us National Municipalities

This study examines the change of municipal financial condition between 2018 and 2022, with a focus on the impact of the COVID-19 pandemic. Using the adjusted Performeter system, we find the overall financial condition of the sample governments is significantly lower in 2020 primarily due to the drastically decreased revenues and rising expenditures. Among the three specific financial areas under examination, financial performance has been most vulnerable to the pandemic impact, but the pandemic effect on financial position is mixed. The results of our study shed light on critical aspect of financial management during crisis to internal as well as external stakeholders of governments. Keywords COVID-19, financial performance, crisis management, local governments, Performeter