State and Local Finance: Increasing Focus on Fiscal Sustainability

Ward, Robert; Dadayan, Lucy

doi:10.1093/publius/pjp014

Cited by 30 publications

(34 citation statements)

References 4 publications

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“…To measure balanced budget stringency, we use the Advisory Commission on Intergovernmental Relation's (1987) 10-point scale (which is now dated, but our investigation has revealed that state requirements have changed only slightly in the 26 years since the scale was devised, and it is still in use by scholars [e.g., Jonas 2012]). many states also have fiscal institutions in place that are intended to limit the size of government, such as limitations on taxing and spending, which index taxing (six states) or spending (twenty-six states) to inflation, population growth, or income; limit appropriations to 95 to 99 percent of projected revenues; or require either voter approval or a legislative supermajority for tax increases (Rose 2010;Ward and Dadayan 2009). Twenty-four states have the ballot initiative through which voters can take matters into their own hands, often using it to try to limit the public sector.…”

Section: Data and Hypothesesmentioning

confidence: 99%

State Fiscal Policy during the Great Recession

Campbell¹,

Sances²

2013

The ANNALS of the American Academy of Political and Social Scie

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Plunging tax revenues and soaring social program demand during the Great Recession created state budget shortfalls of historic magnitude. After reviewing states’ aggregate reaction to the economic downturn, we conduct an original analysis of the recession’s budgetary impact on the states and their policy responses. Economic factors such as falling personal income and home values explain much of the variation in the recession’s impact. State budgeting rules and practices conditioned states’ experiences, but not always as intended: budget gaps were smaller in states with stricter balanced budget requirements, but larger in states with statutory spending limitations. Personal income tax increases were more likely in states with a Democratic legislature or greater public unionization rates, while midyear spending cuts were smaller in states with larger public sector unions. In sum, we find that while states’ objective economic situations determined the bulk of their responses to the Great Recession, political factors determined these responses’ shape and form.

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Section: Data and Hypothesesmentioning

confidence: 99%

State Fiscal Policy during the Great Recession

Campbell¹,

Sances²

2013

The ANNALS of the American Academy of Political and Social Scie

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“…As Chapman (), Ward and Dadayan (), and others point out, these concepts of federal fiscal sustainability are of limited use for studying states and localities for two reasons. First, federal fiscal sustainability is focused on solvency, while solvency is generally not considered a key to state and local fiscal sustainability because of current legal constraints facing state and local governments (Ward and Dadayan ). Federal law explicitly prohibits state bankruptcy.…”

Section: The Concept Of State and Local Fiscal Sustainabilitymentioning

confidence: 99%

“…Mahdavi and Westerlund () show that state and local revenues and expenditures were cointegrated from 1961 to 2006 and therefore conclude that state and local governments were fiscally sustainable. However, the cointegration of revenues and expenditures simply suggests a long‐term solvency, which Ward and Dadayan () point out is not equivalent to state and local fiscal sustainability. Even Mahdavi and Westerlund () recognize that “Balancing recorded revenue and expenditure flows is not necessarily an indicator of good fiscal health” (p. 967).…”

Section: Introductionmentioning

confidence: 99%

Walking a Tightrope: Are U.S. State and Local Governments on a Fiscally Sustainable Path?

Zhao

Coyne²

2017

Public Budgeting & Finance

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Abstract:This paper develops a new measure of state and local fiscal sustainability called the "trend gap," which is based on socioeconomic and other fundamental factors and removes the shortterm influence of the business cycle. The paper estimates the trend gap and finds that the nationwide per capita trend gap has been on a growing path over the past three decades, a different conclusion than found in previous studies. Social insurance and income maintenance programs have played a major role in the growth of the trend gap, while pension and other post-employment benefits (OPEB) plans have become increasingly important in driving it up. In addition, there are large and growing disparities in the trend gap across states.

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“…Meanwhile, Chapman (2008) defined as the ability to over time, to ensure continued service delivery and levels of capital required public demand. However, Ward and Dadayan (2009) indicated that it is simply the ability of a government to balance income and expenditure in the long term. At the sub-national level, Zhao (2012) defined fiscal sustainability as the long-term ability of state and local governments to provide public services demand and willing to have a balance in revenues and expenditures of the public sector over time.…”

Section: Public Debt and Fiscal Sustainabilitymentioning

confidence: 99%

Fiscal Sustainability: Responsiveness in Times of Crisis: A Review of Sub-National Governments in Mexico

Reyes¹,

Delgado²

2015

UCPA

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This paper attends to the issue of sustainability and responsiveness administration under the following premise:Appropriate management of public finances is essential to comply with the provision of public goods and services, which results in the priority agenda of public policies driving governments, however, this may be at risk agenda by two main factors: (1) management of public finances; and (2) external shock: recessions and financial crisis.Consequently, it must generate elements to enhance the responsiveness of governments, as is the implementation of instruments of fiscal sustainability in the public finances that allows reduce the impact of the external economic shocks , the debt overhang and inhibit acts of corruption endanger public services. In this sense, the document in the first part seeks to illustrate the Mexican case, in an approach from the review of legislation by type of sub-national and statistics of public debt and fiscal sustainability indicators. In a second stage is to link the responsiveness of the variable public spending on public services and their relation to the year of recession. Finally, the results will be analyzed to issue policy recommendations.

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State and Local Finance: Increasing Focus on Fiscal Sustainability

Cited by 30 publications

References 4 publications

State Fiscal Policy during the Great Recession

State Fiscal Policy during the Great Recession

Walking a Tightrope: Are U.S. State and Local Governments on a Fiscally Sustainable Path?

Fiscal Sustainability: Responsiveness in Times of Crisis: A Review of Sub-National Governments in Mexico

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