The effects of tax and expenditure limits on state fiscal reserves

Maher, Craig; Stallmann, Judith I.; Deller, Steven C.; Park, Sungho

doi:10.1177/0952076716660607

Cited by 20 publications

(28 citation statements)

References 69 publications

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“…Anti‐tax sentiments may lead localities to watch their general fund balances to keep them at politically palatable levels. This finding echoes evidence on the negative associations of TEL stringency for states (Maher et al ) and localities (Snow, Gianakis, and Haughton ). Cities with the council‐manager form of government have similar unassigned balances but significantly higher unrestricted net assets than mayor‐council cities.…”

Section: Resultssupporting

confidence: 86%

“…Socioeconomic variables are drawn from the American Community Survey (ACS) of the U.S. Census Bureau (USCB 2018). State‐imposed TELs are a legal stringency index introduced by Amiel, Deller, and Stallman () and updated by Maher et al (). The form of government variable comes from the International City/County Management Association (ICMA) (ICMA ).…”

Section: Methodsmentioning

confidence: 99%

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Toward a Theory of Fiscal Slack

Gorina¹,

Maher

Park

2019

Public Budgeting & Finance

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Though the fiscal slack literature has advanced over the past decade, more research is needed for a systematic understanding of the determinants and uses of fiscal reserves at the local level. This paper reviews theory and empirical evidence on the determinants of municipal fiscal reserves offers a conceptual framework for analyzing fiscal reserves accumulation and tests a series of hypotheses using a panel of 2007–2012 financial data for 145 U.S. cities from 21 states. Generalized least squares models show that unassigned general fund balances and unrestricted net assets are positively associated with general fund surpluses in the previous year and with local household incomes, while not being related to measures of fiscal risk, revenue effort, and voter characteristics. Overall, the findings suggest a relatively stronger influence of the capacity to save than the need to save on local fiscal reserves.

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Section: Resultssupporting

confidence: 86%

Section: Methodsmentioning

confidence: 99%

Toward a Theory of Fiscal Slack

Gorina¹,

Maher

Park

2019

Public Budgeting & Finance

Self Cite

View full text Add to dashboard Cite

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“…Neither of these findings is surprising. Although many viewed TELs through the lens of restrictions on states’ capacity to raise revenue, they may restrict the capability of states to spend (Maher, Stallaman, Deller, and Park 2017). As a result of these restrictions, states may not be able to spend their way as easily into fiscal distress.…”

Section: Resultsmentioning

confidence: 99%

You Don't Always Get What You Want: The Effect of Financial Incentives on State Fiscal Health

McDonald

Decker

Johnson

2020

Public Administration Review

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Governments frequently use financial incentives to encourage the creation, expansion, or relocation of businesses within their borders. Research on financial incentives gives little clarity as to what impact these incentives may have on governments. While incentives may draw in more economic growth, they also pull resources from government coffers, and they may commit governments to future funding for public services that benefit the incentivized businesses. The authors use a panel of 32 states and data from 1990 to 2015 to understand how incentives affect states’ fiscal health. They find that after controlling for the governmental, political, economic, and demographic characteristics of states, incentives draw resources away from states. Ultimately, the results show that financial incentives negatively affect the overall fiscal health of states.

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“…In fact, Maher et al (2017) examine the impact of TEL stringency on fiscal reserves. According to their research, the stringency has a negative association with a level of GFBs but no significant relationship to a level of BSFs.…”

Section: Literature Reviewmentioning

confidence: 99%

Does the Stringency of State Tax and Expenditure Limitations Discourage Political Manipulation in Fiscal Reserves?

Ryu

Cho

Kim

2020

Public Administration Review

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This article examines how state tax and expenditure limitations (TELs) affect the size of fiscal reserves over election cycles. Using a panel data set of 47 U.S. states from 1986 to 2013, we find that the persistent pattern of electoral cycles in general fund balances (GFBs) disappears in states with stricter TELs. Regarding a budget stabilization fund balances (BSFs), the preelection and election downward effect diminishes and becomes statistically insignificant while the postelection upward effect increases and becomes significant in states with stricter TELs. Our findings reveal that the stringency of TELs not only eliminates electioneering's impact on GFBs but also coincides with increases in BSFs, particularly in postelection years. Consistent with the principal–agent theory, politicians tend to use a budget stabilization fund (BSF) as a secondary saving account to circumvent stronger TELs and save more BSFs after elections.

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The effects of tax and expenditure limits on state fiscal reserves

Cited by 20 publications

References 69 publications

Toward a Theory of Fiscal Slack

Toward a Theory of Fiscal Slack

You Don't Always Get What You Want: The Effect of Financial Incentives on State Fiscal Health

Does the Stringency of State Tax and Expenditure Limitations Discourage Political Manipulation in Fiscal Reserves?

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