Author: Evgenia GorinaPublisher:
ISBN:
Category :
Languages : en
Pages : 32
Book Description
The Great Recession produced a wave of fiscal crises in American cities and counties. In addition to the high profile bankruptcies in Vallejo, Stockton, San Bernardino, many local governments were compelled to declare fiscal emergencies, raise tax rates, lay off or furlough workers, and undertake other unpopular strategies of fiscal retrenchment. Yet, other municipalities weathered the recession without taking such actions. Using a variation in local fiscal performance in the Great Recession and years that followed (FY2007-2012), we develop and test a model of fiscal distress for cities and counties. The model focuses on the relationship between fiscal distress and a set of its leading indicators. Our work contributes local fiscal management research in two ways. First, we work with data from local Comprehensive Annual Financial Reports (CAFRs), budgets and media coverage to construct a unique dependent variable of fiscal distress. And second, our models include a wide variety of fiscal and socio-economic variables as predictors. Such variables include measures of fiscal reserves, debt, pension funding discipline, as well as data on real estate pricing, local incomes, and unemployment. The study will also include fiscal structure variables and will highlight the role of revenue composition in local financial management.
