As the local government sector in the United States has become extremely fragmented with the proliferation of many special districts in the last seven decades, monitoring the financial condition of special districts should be a priority for both state and local governments. Although financial condition indicators of general-purpose local governments have been widely developed, such indicators for special district governments are currently emerging. This study draws on a conceptual framework adapted from the works of Crosby and Robbins (2013) and Trussel and Patrick (2013) and proposes a 9-point financial condition system to monitor and assess the fiscal health of special districts in the state of Illinois. Such a system could be easily applied to other states that want to monitor the fiscal condition of their special-purpose entities.
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