The Evolution of the State and Local Government Municipal Debt Market over the Past Quarter Century

Hildreth, W. Bartley; Zorn, C. Kurt

doi:10.1111/j.1540-5850.2005.00007.x

Cited by 61 publications

(42 citation statements)

References 35 publications

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“…Despite the fact that many states limit new municipal debt, cities can often find creative ways to bypass debt limits. They can issue different types of revenue bonds that are not limited, such as non-guaranteed debt, which circumvents state methods of constraining city spending (Hildreth and Zorn, 2005;Aronson and Hilley, 1986). As a result, mayors that wish to spend money will finance these expenditures by issuing debt.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Mayoral Partisanship and Municipal Fiscal Policy

Benedictis-Kessner

Warshaw

2016

The Journal of Politics

157

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Does it matter for municipal fiscal policies which party controls the mayorship in municipal government? The bulk of the existing evidence says no. But there are a variety of theoretical reasons to believe that mayoral partisanship should affect municipal policy outcomes. In this paper, we examine this question using data on nearly 1000 elections in medium and large cities over the past 60 years. In contrast to previous work, we find that mayoral partisanship has a significant impact on the size of municipal government. Overall, Democratic mayors spend more than Republican mayors. The bulk of this additional spending comes on roads, housing, libraries, and interest. We find a modest impact of mayoral partisanship on city tax levels. However, Democratic mayors issue substantially more debt than Republican ones. They also spend much more to service interest on debt. Our findings show that mayoral partisanship matters for city policy. Moreover, our findings add to a growing literature indicating that the constraints imposed on city policymaking do not prevent public opinion and elections from having a meaningful impact on municipal policy.

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Section: Theory and Hypothesesmentioning

confidence: 99%

Mayoral Partisanship and Municipal Fiscal Policy

Benedictis-Kessner

Warshaw

2016

The Journal of Politics

157

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“…One federal‐level restriction on the use of public debt is the ability of state and local governments to issue bonds to subsidize and support economic development and other private purpose projects which was capped by the Tax Reform Act of 1986 (Lemov ; Temple ). In that legislation, a state's ability to issue private purpose bonds was limited to a state per capita debt issuance allocation which reduced the federal tax expenditure associated with tax‐exempt municipal bonds (Hildreth and Zorn ).…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of Debt Concentration at the State Level

Greer¹,

Denison²

2016

Public Budgeting & Finance

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We examine the general factors that affect the distribution of debt among state and local governments. We measure the distribution as the percentage of total state and aggregate local debt that is issued or held by the state level of government. Using a fiscal federalism framework, we discuss the fiscal, legal, and political factors that play an important role in determining the level of government that issues debt. Findings suggest that important factors of debt concentration at the state level include state political ideology and economic factors of income per capita and unemployment rates.

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“…Over the last 25 years, revenue bonds have comprised from 60 to 70 percent of the annual dollar volume in the US municipal market. (Hildreth and Zorn, 2005) A parallel trend in the American tax-exempt market is the growth in financial guarantee insurance. A state or local government debt issuer pays a premium up-front to secure an agreement for the term of the bonds that the high credit-quality specialty insurer will step-in and pay the investor if the debt issuer defaults on the credit.…”

Section: Debt Instrumentsmentioning

confidence: 99%