The budget of a government where recurring revenues (such as property taxes) pay for recurring expenditures (like police officer salaries) and nonrecurring revenues (such as the sale of asset) either pay for nonrecurring expenditures (like a capital project) or are placed in savings. A government that balances its budget by using fund balance or nonrecurring revenues to pay for recurring expenditures, will in time face fiscal distress. The use of fund balance for capital projects is not a sign of a structurally unbalanced budget if there are sufficient reserves for operations and unforeseen events.
This is one of the Seven Keys to a Fiscally Well-Managed Government.
