The impact of the Great Recession and the housing crisis on the financing of America's largest cities

Chernick, Howard; Langley, Adam; Reschovsky, Andrew

doi:10.1016/j.regsciurbeco.2011.04.002

Cited by 70 publications

(68 citation statements)

References 11 publications

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“…The recent literature on local public finance shows that declines in housing prices have a lagged effect on local property tax collections, but once a decline in local public revenues occurs, localities react by cutting expenditures. For evidence on the relationship between housing prices and local government budgets, see Lutz et al (2010), Chernick et al (2011), Alm et al (2014), and Cromwell and Ihlanfeldt (2015).…”

Section: Revenuesmentioning

confidence: 99%

Trade Shocks and the Provision of Local Public Goods

Feler¹,

Senses

2017

American Economic Journal: Economic Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Trade Shocks and the Provision of Local Public GoodsIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 10231 September 2016 ABSTRACT Trade Shocks and the Provision of Local Public Goods *We analyze the impact of trade-induced income shocks on the size of local government, and the provision of public services. Areas in the US with declining labor demand and incomes due to increasing import competition from China experience relative declines in housing prices and business activity. Since local governments are disproportionately funded through property and sales taxation, declining property values and a decrease in economic activity translate into less revenue, which constrains the ability of local governments to provide public services. State and federal governments have limited ability to smooth local shocks, and the impact on the provision of public services is compounded when local income shocks are highly correlated with shocks in the rest of the state. The outcome is greater inequality not only in incomes but also in the quality of public services and amenities across US jurisdictions.JEL Classification: F14, F16, H41, H70, R12, R23

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Section: Revenuesmentioning

confidence: 99%

Trade Shocks and the Provision of Local Public Goods

Feler¹,

Senses

2017

American Economic Journal: Economic Policy

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“…Local governments have experienced severe revenue shortages as property values have fallen, because property taxes represent a large proportion of the general revenue source. Under these conditions, it is difficult for local governments to maintain their current service level (Chernick, Langley, & Reschovsky, 2011). Thus, local governments must search for alternative revenue sources.…”

Section: Revenue Diversification and Volatilitymentioning

confidence: 99%

Can Nonprofit Enterprises Lead to Better Revenue Conditions in Local Government?

Park

Kim

2016

The American Review of Public Administration

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Nonprofit enterprises may play an important role in revenue diversification from a government perspective, especially when local governments suffer from revenue shortages. This study attempts to examine whether an increasing number of nonprofit enterprises influence revenue diversification, as measured by the Herfindahl-Hirschman Index (HHI), as well as volatility using a panel data set from 2007 to 2012. The results indicate that local governments can secure more diversified and increased income sources as more nonprofit enterprises are created throughout the county. Moreover, nonprofit enterprises with stable business categories contribute more and therefore actively improve revenue conditions of local governments.

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“…Thus, a workable fiscal federalism depends on keeping close watch for changes in the ratio of independent revenue and portion of the budget dedicated to public management. Chernick, Langley, and Reschovsky (2011) added another indicator in their model for central city spending reductions based on the structural issues underlying municipal fiscal distress, namely, the sea change effect (i.e., permanent and major shifts in labor, industry, and employment levels) of the Great Recession on local economies and the housing crisis's snowball effect on property tax revenues. Their analysis accurately indicates that Stockton, California, would suffer greatly due to housing value declines, as evidenced by its Chapter 9 bankruptcy in 2013.…”

Section: Predicting Fiscal Distressmentioning

confidence: 99%

Emergency Management 2.0

Kasdan

2016

Urban Affairs Review

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There are more causes of fiscal distress than remedies. A nascent field is emerging built on the practices utilized to confront fiscal distress. The usual method follows a federal structure in that the state has ultimate responsibility when local governments fail, leaving communities to live in a "new normal" of austere oversight. As more urban areas contend with extended economic downturns, political paralysis, and social apathy in the face of unsustainable governance, there is a need for a strategic approach to the administrative side of fiscal distress management. Although cutbacks, consolidations, and service reductions are the tactical tools of the trade, emergency financial management also requires a guiding strategy that protects the fundamental purpose and character of the local government. This article uses ideas from disaster management and the fiscal crises in Michigan to develop four key elements in a strategic approach to emergency financial management.

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The impact of the Great Recession and the housing crisis on the financing of America's largest cities

Cited by 70 publications

References 11 publications

Trade Shocks and the Provision of Local Public Goods

Trade Shocks and the Provision of Local Public Goods

Can Nonprofit Enterprises Lead to Better Revenue Conditions in Local Government?

Emergency Management 2.0

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