Examining Factors that Impact Mississippi Counties' Unreserved Fund Balance during Relative Resource Abundance and Relative Resource Scarcity

Although using some of the same organizational and financial factors examined by prior researchers to build and test models that explain factors influencing change in the general fund unreserved balance for smaller, rural, and less affluent counties in Mississippi, the rationale of this study is to build additional support that applying the recommended 5–15 percent savings benchmark across all jurisdictions is not a sufficient guide. Overall, Mississippi counties maintain unreserved fund balances ranging from a negative balance to over one hundred percent of their current expenditures. Counties also increase reserves during times of relative resource abundance and decrease them during relative resource scarcity. Moreover, they tend to address short‐term needs and resident demands when revenues are plentiful. During relative resource scarcity, however, they are more cost‐conscious and focus on maintaining rather than expanding current expenditures. This research shows that counties using the Beat system, a political form of government, are more likely to behave more frugally than counties using a Unit system, an administrative form of government.