While researchers have examined fiscal stabilization for state and local governments, less attention has been dedicated to special purpose governments, such as school districts. This paper fills the gap by examining the general unassigned fund balance of Pennsylvania school districts before and after the Great Recession using a Two‐Step Generalized Method of Moments estimator. Although Pennsylvania imposes limitations on the unassigned fund balance, half of school districts are non‐compliant, choosing instead to accumulate savings above the limits to improve their budget flexibility. Since the Great Recession, however, state revenue constraints have challenged savings accumulation. Additionally, while districts use savings for covering expenditures, less unassigned fund balance was drained during downturn years due to cutback management. Collectively, these findings signal a “new normal” for Pennsylvania districts.

Few would question that the Great Recession and its aftermath have proved challenging for government financial management. This depressed economic environment has renewed interest in research involving the accumulation and use of the unassigned fund balance. In this study, we use data on Florida cities to examine the factors affecting the unassigned fund balance before, during, and after the Great Recession. According to our findings, building and maintaining savings at high levels have become routine for Florida cities, irrespective of their government form and the economic conditions they face. This research also provides evidence that Florida cities adapt their savings accumulation strategy, depending on the level of

Over the past two decades, global institutions, including the International Monetary Fund and the Organization for Economic CoOperation and Development, have linked fiscal transparency to better governance, improved economic performance, and increased civic participation in government decision making. As a result, scholars and practitioners have attempted to systematically study the factors associated with a country's fiscal transparency. At the international level, extant research employs cross-sectional analysis, which limits an understanding of how fiscal transparency evolves over time. We address this limitation by offering a cross-national longitudinal analysis of the factors associated with fiscal transparency as measured by the open budget index. Our study spans the years 2006 to 2012, using data on political, fiscal, information access, and economic conditions among 59 countries from nearly every part of the world. Using a first-difference panel regression and robust standard errors clustered by country, we found a positive association between economic recessions and fiscal transparency, indicating that fiscal crises may serve as opportunities for furthering transparency efforts. In addition, our study extends empirical documentation on the positive relationship between fiscal imbalance and fiscal transparency from the United States to the international arena, and provides support for a positive association between development aid and fiscal transparency. We also offer evidence for a negative association between democracy and fiscal transparency, which builds upon an emerging area of research suggesting selective release of government information by democratically elected officials.

The years during and after the Great Recession constrained revenue across all levels of government. Revenue shortfalls in states decreased intergovernmental transfers, which compounded the plight of local governments already facing large declines in own-source property taxes. Among the many casualties of this economic downturn were school districts, which responded by implementing a variety of financial management strategies to continue providing educational service provision to more than 50 million students across the United States. One strategy school districts continue to utilize is countercyclical stabilization of expenditures with fiscal slack, which raises an important—and, to date, largely unanswered—question of how school districts manage to accumulate fiscal slack, given both volatility and decreases in revenues in the years following the Great Recession. One approach is to use implicit slack from biased forecasts to generate explicit fiscal slack in the unassigned fund balance. This article provides evidence for this strategy by empirically testing it with data from Kentucky school districts from school years 2001-2002 to 2013-2014. The findings indicate that school districts are engaged in strategic planning with implicit fiscal slack, which allows them to accumulate explicit fiscal slack, a cornerstone of prudent financial management that can provide budgetary flexibility during financial uncertainty. The relationship between implicit and explicit fiscal slack is heterogeneous over the business cycle, providing further evidence of strategic planning. Practitioners can also use the findings of this article to support the strategic use of forecasts to help accumulate unassigned fund balance, particularly in the years after the Great Recession.

Kleine, A (2019). City on the line: How Baltimore transformed its budget to beat the Great Recession and deliver outcomes. Lanham, MD: Rowman & Littlefield. $35.00 (Paperback), ISBN: 978-1538121887.