Community Business Resouce Council

Government Agencies

 
     
 
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Understanding Government Agencies

Government Critical Business Challenges

If you are experiencing any of these critical business challenges, then CBRC would like to help. Our Business Strategist has helped government agencies overcome their frustrations by conducting a strategic growth analysis - then involving them with designing a business solution to generate revenue and solve their critical business challenges.

 

Here are a few of those business challenges that we have solutions:

  • Tax Revenue Depends on Economy - All levels of government rely on tax revenues to finance government services, and tax revenues are tied to the health of the overall economy. During the late 2000s recession, over 3 million jobs were lost over a period of five months. If people aren't working, they aren't paying payroll taxes and income taxes. They also may have trouble making property tax payments (which primarily fund local government services), and they may reduce consumption, which reduces sales tax revenues. Declining tax revenue is one reason for increased governmental deficit spending, resulting in a rising national debt.
  • Healthcare Costs Have Multiple Impacts - Rising healthcare costs impact the government through employee benefits, and the cost of Medicare and Medicaid programs. As the largest employer in the US, all levels of government are feeling the impact of rising healthcare costs on employee benefit packages. The Congressional Budget Office (CBO) predicts that by 2025, 25 percent of the US economy (as measured by Gross Domestic Product) will be dedicated to healthcare spending. Currently, 17 percent goes to pay for healthcare. In 1962 the number was under 6 percent. By 2018 the US government will become the largest healthcare spender, overtaking the private sector, because of increases in the number of Medicare and Medicaid beneficiaries due to the aging of the baby boom generation.
  • Migration from Northeast and Midwest - The population over the past several years has migrated out of many parts of the Midwest and Northeast in pursuit of warmer weather and "new economy" jobs. The result has been a steadily declining revenue base because of lower tax revenues. The city of Flint, Michigan, recently announced a plan to demolish part of its vacant housing stock in part because city revenues are not high enough to continue providing basic city services to nearly desolate areas.
  • Increasing Debt Load - The federal government, unlike state and local governments, can use debt to pay for operations in years where revenues do not cover expenditures; this annual process is called deficit spending. Since 1970, according to the CBO, the federal government has run a deficit every year except for the years 1998-2001; by some estimates, the annual deficit stood at $1.5 trillion by 2010. The cumulative total of each year's deficits is the national debt, which is currently approximately $13 trillion, and has more than doubled in the past 10 years. As the government shifts more of its revenues to the interest payment on the national debt, it loses the ability to finance other programs and services.
  • Large Percentage of Workforce Nearing Retirement - The federal government has a large number of employees who will soon be eligible for retirement. The impact of all eligible employees retiring at about the same time would result in a "brain drain" as the government loses expertise. Nearly 60 percent of federal employees at the supervisory level were able to retire by the late 2000s. Governments are considering a combination of incentives and new recruitment strategies to counteract this trend.

 

 

 

 

 
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