Service Solvency and Quality of Life After Municipal Bankruptcy

Abott, Carolyn; Singla, Akheil

doi:10.1561/113.00000037

Cited by 1 publication

(5 citation statements)

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“…Research on capital budgeting during economic declines and fiscal crises focuses on the causes of municipal bankruptcy and capital budgeting, namely the emergent strategy (cutback management and stress minimization practices) and the problem-oriented innovative strategy (seeing economic decline as the trigger for innovation and budget reform), and rapprochement to capital budgeting during fiscal emergencies (Abott and Singla 2021a, 2021b; Chen and Bartle 2022; Ermasova 2012, 2013, 2020; Guzman and Ermasova 2023). During economic decline, the gap between available resources and needs widens: “In some cases, more attention has been paid to capital budgets as a way to reduce deficits caused by an excess of recurrent expenditures versus revenues” (Jacobs 2008, 2).…”

Section: Conceptual Issues and Relevant Literaturementioning

confidence: 99%

Section: Conceptual Issues and Relevant Literaturementioning

confidence: 99%

“…The third approach implies that capital budgeting adapts to external conditions, including a fiscal emergency situation (Abott and Singla 2020;Ermasova 2012Ermasova , 2013Ermasova , 2020. Abott and Singla (2020) which suggests that "filing for bankruptcy is associated with a shrinking public sector, but that these declines are also associated with improved service delivery" (p. 1).…”

Section: Capital Budgeting During Fiscal Stress: Economic Decline As ...mentioning

confidence: 99%

“…Chen and Bartle (2022) describe new approaches to fund state and local infrastructure development with the adoption of innovative infrastructure financing. Abott and Singla (2020) suggest that "Chapter 9 bankruptcy may provide governments with the space to improve operations while still cutting costs" (p. 1). Guzman and Ermasova (2023) build a Theory of Municipal Fiscal Emergency and Bankruptcy that includes three major stages: Haphazard Responses, Emergency Responses, and Innovative Responses (HEI).…”

Section: Capital Budgeting During Fiscal Stress: Economic Decline As ...mentioning

confidence: 99%

“…Scholarship on the consequences of fiscal hardship tends to focus on measuring the fiscal health of state and local governments (Abott and Singla 2020, 2021a, 2021b; Brown 1993; Gordon 2018; Moldogaziev and Guzman 2015) or the effect of bankruptcy (eligibility) on municipal borrowing costs (Moldogaziev and Guzman 2015; Moldogaziev, Kioko, and Hildreth 2017, Yang 2019). The topic of municipal bankruptcy remains underexplored.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Capital Budgeting During Municipal Bankruptcy: Cases of Jefferson County, AL; Central Falls, RI; and Vallejo, CA

Ermasova

Guzman

2023

State and Local Government Review

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This comparative case study explores the capital budgeting before, during, and after municipal bankruptcy in three U.S. local governments: Jefferson County, AL; Central Falls, RI; and Vallejo, CA. This in-depth examination of capital budgeting challenges reveals a pattern across all cases—a significant decrease in capital spending on infrastructure and maintenance before and during municipal bankruptcy. In fact, the mismanagement and underinvestment in capital infrastructure were some of the causes of municipal bankruptcy in all three local governments. The comparison of the reforms adopted after the bankruptcy shows that all three local government went through a similar two-stage process of recovery and restructuring, employing the emergent strategy to exit the bankruptcy and the problem-oriented innovative strategy to recover. These results show that even though all three local government significantly decreased spending on capital investments and maintenance as part of the emergent strategy, investment in public infrastructure during the recovery, and reconstructing became a priority across all selected cases.

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