Financial condition analysis is a critical task for public managers, but it is still unclear which indicators are the most salient measures of financial well‐being. The financial health of Detroit, Michigan is unequivocally poor, providing an interesting case to evaluate the financial condition indicators that currently exist. We calculate the key financial indicators using data from Detroit over the last 11 years. We find the indicators fall into three groups: those that show no sign of impending financial crisis, those that show a steady worsening financial condition, and those that demonstrate a substantial change immediately prior to filing bankruptcy.
Public managers and organizations are often encouraged to take a proactive role in finding solutions to the challenges that face their communities. These challenges require meeting increasingly high expectations for public service provision with ever reducing resources. This research investigates the relationship between change in resource constraints—as measured by longer and shorter term financial condition—and the entrepreneurial orientation of US local governments. Theoretically, it remains unclear whether resource constraints foster or impede entrepreneurial actions (i.e., risk taking, proactivity, and innovation) in public organizations. While entrepreneurial actions may be related to increased organizational financial capacity, a decline in an organization's financial condition might motivate proactivity, innovation, and risk taking as problem‐solving mechanisms and a means to continue service provision. We explore this relationship using two sources of data: a 2012 national survey of managers in 500 cities and financial data from Comprehensive Annual Financial Reports. Our findings suggest that resource constraints are associated with increased entrepreneurial activity in US local governments.
Historically, revenue associated with things like traffic citations—termed fines and forfeitures—has made up an insignificant portion of city revenue. In recent years, however, cities are increasingly reliant on these revenues. This changed without fanfare, meaning there is little understanding of how or why it occurred. One potential explanation is budgetary, meaning cities rely more on fines due to increased fiscal stress or demand for public safety services. Alternatively, existing research demonstrates that race and representation are significant predictors of crime and punishment outcomes, including traffic citations. Using a stratified random sample of California cities, this study investigates which of these factors explain city reliance on revenue from fines and forfeitures. It finds that cities’ reliance on fines and forfeitures is not associated with budgetary need or public safety service provision, but is associated with the race of the population and the racial composition of law enforcement.
The increasing use of debt‐related derivatives over the last 10 years, combined with the recent global financial crisis' impact on these instruments, greatly affected the finances of many state and local governments in the United States. Some observers believe the negative effects could have been minimized had governments established prudent financial risk management policies governing these products. This research describes and analyzes debt‐related derivatives policies at the state level. It finds that while 30 states used debt‐related derivatives between 2005 and 2010, only 20 states have policies guiding financial derivative practices, with the policies being of varying breadth and depth.
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