2022
DOI: 10.1111/pbaf.12332
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Home rule and municipal revenue stability: New evidence from Texas

Abstract: Scholars have long debated whether home rule powers help improve municipal financial well‐being; however, a consensus has yet to be reached. This study advances the home rule literature by causally estimating the impact of home rule in Texas on municipal revenue stability. To accomplish this, we employed a difference‐in‐differences estimator coupled with event‐study specifications on a 40‐year‐long panel data set. This approach revealed strong empirical evidence that cities adopting a home rule charter had a s… Show more

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Cited by 3 publications
(3 citation statements)
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References 48 publications
(73 reference statements)
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“…On the other hand, one would expect Dillon rule cities to have less leeway than home rule cities in substantively decreasing (or increasing) police budgets. However, even if the effect in Model 1 of Supplemental Table E2 were to be statistically significant, it may be consistent with research concluding that relative to Dillon rule municipalities, cities with home rule charters are more likely to experience revenue stability (Zhang and Nguyen-Hoang 2023). Hence, with the increased likelihood of revenue decline, Dillon rule cities may possess less flexibility in keeping the police share of the budget intact during a pandemic, perhaps instead redirecting funds to health-related priorities.…”
Section: Discussionsupporting
confidence: 69%
“…On the other hand, one would expect Dillon rule cities to have less leeway than home rule cities in substantively decreasing (or increasing) police budgets. However, even if the effect in Model 1 of Supplemental Table E2 were to be statistically significant, it may be consistent with research concluding that relative to Dillon rule municipalities, cities with home rule charters are more likely to experience revenue stability (Zhang and Nguyen-Hoang 2023). Hence, with the increased likelihood of revenue decline, Dillon rule cities may possess less flexibility in keeping the police share of the budget intact during a pandemic, perhaps instead redirecting funds to health-related priorities.…”
Section: Discussionsupporting
confidence: 69%
“…In fact, "The effects of fiscal policy on economic activities have been the focus of academic research and public debate" (Kim and Nguyen, 2020). In this regard, Zhang and Nguyen-Hoang (2022), "Found that the income stability of autonomous cities comes from the increase in property tax." Of course, "Voter participation has a positive impact on cost efficiency" (Geys et al, 2010).…”
Section: Literature Reviewmentioning
confidence: 99%
“…As per the research outcome, cities that had broadened their revenue structure by tapping non-tax revenue sources were able to handle higher current operational spending with bigger reserves. Revenue-stabilization effects of home rule was examined by Zhang and Nguyen-Hoang (2021). As per the study, increased reliance of home rule cities on property tax to raise more revenue was the major factor behind revenue stability.…”
Section: An Overview Of Total Revenue Sourcesmentioning
confidence: 99%