Outsourcing Services: A Theory of Special District Incorporation

Park, HyungGun; Park, Hyung Jun

doi:10.1080/15309576.2021.1972430

Cited by 9 publications

(3 citation statements)

References 43 publications

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“…Are special districts merely a passive workaround to the preemption, or are they innovative ways to respond to local residents’ demands? Some recent studies suggest special districts to complement general-purpose governments especially when the latter is constrained (Deslatte, Scott, and Carter 2019; Park and Park 2021). To this end, this research note provides additional evidence that shows the use of special districts in the context of state preemption.…”

Section: Discussionmentioning

confidence: 99%

The Impact of State Fiscal Preemption on Local Taxing Authorities: A Case of Michigan

Wang

2023

Urban Affairs Review

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This study investigates the impact of state fiscal preemption on local governance structure. Specifically, it focuses on state-imposed tax and expenditure limits (TELs), which constrain local governments’ ability to raise property tax revenues. Using a unique data set on millage rates levied by all local governments in Michigan from 2011 to 2017, the study examines how the state-imposed limitation on local property taxable values affects local taxing efforts. The findings show that the assessment limit results in higher taxing power by cities and special districts. It also indicates local residents’ preferences to be drivers for the greater taxing efforts.

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Section: Discussionmentioning

confidence: 99%

The Impact of State Fiscal Preemption on Local Taxing Authorities: A Case of Michigan

Wang

2023

Urban Affairs Review

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“…For instance, service functions like flood control, irrigation, and natural resource conservation are more demanded by specific groups of people living in certain geographic surroundings. As those services tend to be capital‐intensive and location‐specific, it is costly for general‐purpose governments to separately provide the services with unshared inputs across several unique service types (Park and Park 2021). SDs may take charge of such service provision to narrow the variety of services offered that would have burdened traditional governments but at the cost of scale economies enjoyed from offering fewer service types.…”

Section: Competing Theories Of District–nonprofit Relationshipmentioning

confidence: 99%

Testing a relationship between special districts and nonprofits: Do they substitute or complement?

Park

2023

Social Science Quarterly

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As similar modes of public service delivery on behalf of general-purpose governments, a relationship between special districts(SD) and nonprofit organization are empirically tested. Methods: Using U.S. data from the Census of Government Finance and the National Center for Charitable Statistics databases between 1997 and 2017, this study regress counts and spending level of SDs on the nonprofits' counterparts. Results: For both counts and spending level, there are positive association between SDs and nonprofit organizations. Conclusion: SDs and nonprofit organizations complement each other even when their service domains overlap.Nonprofit sector in the United States has steadily grown both in the numbers of organizations and financial size (NCCS Team 2020). From 2006 to 2016, the nonprofit numbers registered at the Internal Revenue Service (IRS) increased by 4.5 percent. In the same period, the nonprofits' revenue (24.2 percent) and asset values (30.7 percent) significantly rose, both of which exceeded the Gross Domestic Product(GDP) growth rate (13.6 percent). Nonprofits are increasingly seen as alternative providers of public services or as collaborators funded by government financial aid (Young 2000). However, empirical studies often show inconsistent findings, which may arise due to the diverse contexts of their analyses like examining the issue at different levels of government and measurements, impairing a consensus of validity for their arguments (Matsunaga and Yamauchi 2004).This study unravels government-nonprofit relations by distinguishing the role of special district (SD), the quasi-governmental unit that provides fewer services at the designated area with fiscal and administrative independence from cities and counties (or general-purpose governments). Regional governmental agencies across vast geographical areas with a single purpose are not considered as SDs, as they are authorized by federal legislation and/or administrative regulation (Bollens 1986;Foster 1997). SDs normally have governing boards and employees and provide services to the public, while some forms of SDs do not, such that instrumentally raise funds and issue bonds. Specialized services from the various districts resemble private goods (Burns 1994). This is due to their primary funding sources and eligibility for exclusive service provisions being based on a locational basis (Park 2021). Thus, SDs and nonprofits function similarly despite sector differences, as they are responsible for services that were never or are no longer provided by general-purpose governments (Foster 1997).However, it remains untested in the literature how SDs affect nonprofit proliferation. To explore the potential relationship between two organizations in different sectors, this study proposes two competing district-nonprofit relationships. Using U.S. data from the Census of Government Finance and the National Center for Charitable Statistics (NCCS) databases between 1997 and 2017, this study finds that greater size

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“…Due to their flexibility and specialized nature, special districts are often better suited to capture economies of scale, both in terms of customers and revenue generation, for a particular public service. General‐purpose local governments, particularly municipalities, are often constrained by inadequate tax bases or fiscal limitations, making the ‘outsourcing’ of public services to special districts attractive (Park & Park, 2021). Similarly, functional transfers of authority between counties and special districts may allow citizens to re‐sort service responsibilities consistent with their preferences (Oakerson 1999).…”

Section: Government As Substitutes Versus Complementsmentioning

confidence: 99%

Are special districts strategic complements or strategic substitutes?

Goodman

Carroll

2023

Public Administration Review

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What happens to general‐purpose local government spending for service provision when a special district enters the public service market? Theoretically, special districts can act either as complements by supplementing existing service provision spending or as substitutes by supplanting current service provision spending. We find a substitution effect using fixed effects regression on urban counties in the United States from 1972 to 2017. Special districts replace spending for public service provision by county governments; however, we find no similar result for municipal governments. But the results are nuanced—findings are confined mainly to public services that tend to cover large land areas, like fire protection, sewerage, and solid waste management. Furthermore, we find evidence that day‐to‐day operations drive observed substitution, and that county size is an important factor depending on the functional service area.

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Outsourcing Services: A Theory of Special District Incorporation

Cited by 9 publications

References 43 publications

The Impact of State Fiscal Preemption on Local Taxing Authorities: A Case of Michigan

The Impact of State Fiscal Preemption on Local Taxing Authorities: A Case of Michigan

Testing a relationship between special districts and nonprofits: Do they substitute or complement?

Are special districts strategic complements or strategic substitutes?

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