Municipal Capital Spending during the “Boom”

Pagano, Michael A.

doi:10.1111/1540-5850.00070

Cited by 42 publications

(38 citation statements)

References 1 publication

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“…The study of Wang, Hou, and Duncombe (2007) further reveals that states with more economic volatility are more likely to adopt pay-go financing, particularly during the period of economic expansion. A similar finding on pay-go financing emerges from an earlier study by Pagano (2002) that looks at municipal capital spending during the 1993-2000 economic expansion. His study suggests that most of the rapid growth in capital outlays were brought by own-source-revenues.…”

Section: Capital Expenditure Financingsupporting

confidence: 78%

Using Trend Data to Evaluate the Differential Response of State Borrowing to Revenue Volatility

Yan

2013

Public Budgeting & Finance

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Revenue volatility has been a major concern for many state governments as it affects public service delivery and government operation in various ways. Among those, revenue volatility often affects the extent to which state governments utilize borrowing to pay for their infrastructure. As state governments have been ever increasing their reliance on borrowing to finance their capital needs, this paper aims to explore the differential impact of revenue volatility measured by negative versus positive revenue deviation of from trend on state governments' decision in debt financing capital spending. These relationships are empirically examined by modeling various factors that explain state governments' reliance on debt financing with the US Census Bureau's State Government Finance database covering 1987–2004. Findings suggest negative revenue deviation caused a state to decrease the issuance of general obligation (GO) debt and GO debt as a proportion of total long‐term debt issuance when the magnitude of the deviation is below the medium range, but increase the issuance of revenue debt and long‐term debt only when the deviation is high. In the scenario of positive deviation from trend, both the direction and its magnitude increased the issuance of the GO and long‐term debt as well as the GO share. Findings from this research provide new insight into the effects of revenue volatility on the financing choices of state governments. It also has important implications for state public administrators who aim to mitigate the negative impact of revenue uncertainty and exercise a proactive control over state debt burden.

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Section: Capital Expenditure Financingsupporting

confidence: 78%

Using Trend Data to Evaluate the Differential Response of State Borrowing to Revenue Volatility

Yan

2013

Public Budgeting & Finance

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“…consumer spending and employment), which also benefits municipalities that receive a portion of their revenues from sales and income taxes (Kitchen, 2004;Pagano, 2002). A subset of studies contained findings that lend insights on the potential implications of travel mode choice for local government tax revenues; however, more research is needed to discern how AT investment impacts the distribution of consumer expenditures by travel mode, including considerations for modal shifts, frequency of trips and multimodal trips taken.…”

Section: Discussionmentioning

confidence: 99%

Exploring active transportation investments and associated benefits for municipal budgets: a scoping review

et al. 2016

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Municipalities play an important role in the planning and development of communities that support active transportation (AT), which refers to human-powered modes of travel, such as walking and cycling. Municipal-level stakeholders involved in landuse and transportation infrastructure planning consider multiple social, environmental and economic considerations to inform decision-making and investments in AT. Evidence around the fiscal benefits of AT investment for local governments has not been systematically identified. This scoping review sought to explore the existing evidence regarding investments in AT and opportunities for savings on municipal expenditures and revenue generation. In total, 7060 records were located and screened; of which 162 full-text articles were reviewed. Ultimately, 23 articles met our inclusion criteria and were included in this review. The available evidence focuses on potential economic benefits of AT in the areas of tax revenues, property values, consumer spending and employment, all of which are relevant sources of revenue generation in municipal operating budgets. An evidence gap was identified regarding AT infrastructure investments and benefits corresponding to municipal expenditures (e.g. maintenance cost savings). Notably, a large portion of literature was published after 2009, suggesting that municipal-level evidence on the fiscal benefits of AT investments may just be emerging. ARTICLE HISTORY

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“…The authors' analysis reveals a dire need for capital maintenance and an overwhelming backlog of required 9 Although the decision to consumption smooth may be attractive and lead local governments to believe that debt financing of capital is their best option, Trussel and Patrick (2012) find that fiscal distress can best be reduced by either raising taxes or decreasing debt, suggesting that debt increases fiscal distress. Pagano (2002) finds that municipalities do choose pay-as-you-go financing in boom years. 10 For example, in one analysis the author analyzes longer term effects and finds that there is change in priorities as anticipated and that there is not simply a return to pre-crisis spending patterns, but the author does not examine capital spending (Hoggart, 1991).…”

Section: Long-term Consequencesmentioning

confidence: 99%

Local Government Capital Spending During and After Recessions: A Cause for Concern?

Afonso

2014

International Journal of Public Administration

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This article combines literature on cutback management with the results of a survey of county commissioners. Specifically, it focuses on the use of capital spending reductions in county government to cope with fiscal stress and the potential long-term impact of such reductions in response to the limited amount of research on this form of local government. In light of the literature and survey results, it recommends that county governments change their behavior and avoid cuts to their capital budgets due to the long-term costs of delayed maintenance and the opportunity costs incurred by stifling economic development. It also presents policy choices available to many counties that enable them to maintain capital investments, including public-private partnerships and earmarked local option sales taxes. The study concludes with a call for quantitative research on the long-term effects of capital reductions during economic downturns.

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Municipal Capital Spending during the “Boom”

Cited by 42 publications

References 1 publication

Using Trend Data to Evaluate the Differential Response of State Borrowing to Revenue Volatility

Using Trend Data to Evaluate the Differential Response of State Borrowing to Revenue Volatility

Exploring active transportation investments and associated benefits for municipal budgets: a scoping review

Local Government Capital Spending During and After Recessions: A Cause for Concern?

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