The overall rate of inflation in the U.S. is currently 7.9%. We all know that the cost to feed our families has been impacted by higher grocery prices—and filling up our gas tanks cost about 40% more than a year ago. The average taxpayer’s paycheck has not increased at the same rate that the cost of living has, so families are caught in the squeeze of higher living expenses and flat incomes.

Local governments can help by doing whatever they can to ensure property taxes, municipal fees, and other local taxes do not also increase. Letting such taxes and fees rise will further increase inflation and put even more financial pressures on already overburdened taxpayers.  

One especially effective, easy-to-implement way to do this is by maximizing the interest that local governments earn on the public funds already sitting in their municipal bank accounts. Think of it this way: Every dollar earned in interest is one less dollar that needs to be collected by municipalities from hard-working taxpayers.

Managing liquidity in order to generate income can add hundreds of thousands or even millions of dollars to local governments’ coffers. 

One Pennsylvania county earned $2.5 million in interest last year by effectively managing their cash, even while interest rates were essentially at zero percent.  A county in Nebraska had interest earnings of $2.7 million, and a county in New York State earned $1.4 million. Even small-to-medium-size counties that are using the latest, most powerful liquidity tools earned $500,000 to $750,000 or more in interest last year.  With the Fed now raising interest rates, the results for 2022 are sure to be even more impressive.

three+one’s cashVest^® platform is far and away the most efficient, effective, and powerful tool to help manage a local government’s liquidity. Counties, cities, and higher Ed institutions all across the United States are successfully using this platform to maximize the value of their cash. To put it simply, if your entity isn’t using cashVest, it’s leaving money on the table.  

In today’s inflationary environment, local governments must leave no stone unturned in the effort to help taxpayers cope with inflation.