Abstract Local governments across the United States have had a prominent role in financing the pandemic response during the ongoing COVID‐19 outbreak and economic recession. Yet, such governments are increasingly facing budgetary strain as sources of tax revenue evaporate. If the financial burden on such governments can be eased, they may better address those aspects of pandemic response to which they are uniquely suited, such as coordinating resources and re‐allocating space within their communities. This paper investigates the role of Medicaid, traditionally the default insurer of the unemployed, as a stabilizing force on local government budgets. Using panel data from county governments during the Great Recession (2006–2012), we estimate the effect of state Medicaid generosity on public finances. We find that Medicaid mitigates the effect of unemployment shocks on county government expenditures, specifically safety‐net programs and debt. We apply these point estimates to extrapolate predictions based on contemporary state Medicaid generosity and local unemployment rates. In this way, we show that Medicaid continues to mitigate the financial strain on local government during the COVID‐19 pandemic. Applications For Practice • Local governments contribute heavily to hospital, health, and welfare services in the United States, and are an important implementor of pandemic policies.• As the pandemic spreads, local governments incur additional expenditures in a time of depressed revenue.• Often, the debate around Medicaid financing is framed around federal and state government budgets. However, local governments support the safety‐net for indigent residents by assuming a substantial role in the finance and delivery of health care and will likely benefit from this relief.• Our findings indicate higher Medicaid generosity reduces the downstream economic strain on local governments emanating from labor market shocks.• State and federal policy may establish grants to aid local governments during the pandemic, such as in the CARES Act of 2020. However, we establish that the Medicaid program is itself a channel by which state and federal governments can support local governments.
{"title":"Too small to fail: The role of Medicaid in mitigating pandemic‐related fiscal strain on local governments","authors":"Victoria E Perez, J. Benitez, J. Ross","doi":"10.1111/pbaf.12298","DOIUrl":"https://doi.org/10.1111/pbaf.12298","url":null,"abstract":"Abstract Local governments across the United States have had a prominent role in financing the pandemic response during the ongoing COVID‐19 outbreak and economic recession. Yet, such governments are increasingly facing budgetary strain as sources of tax revenue evaporate. If the financial burden on such governments can be eased, they may better address those aspects of pandemic response to which they are uniquely suited, such as coordinating resources and re‐allocating space within their communities. This paper investigates the role of Medicaid, traditionally the default insurer of the unemployed, as a stabilizing force on local government budgets. Using panel data from county governments during the Great Recession (2006–2012), we estimate the effect of state Medicaid generosity on public finances. We find that Medicaid mitigates the effect of unemployment shocks on county government expenditures, specifically safety‐net programs and debt. We apply these point estimates to extrapolate predictions based on contemporary state Medicaid generosity and local unemployment rates. In this way, we show that Medicaid continues to mitigate the financial strain on local government during the COVID‐19 pandemic. Applications For Practice • Local governments contribute heavily to hospital, health, and welfare services in the United States, and are an important implementor of pandemic policies.• As the pandemic spreads, local governments incur additional expenditures in a time of depressed revenue.• Often, the debate around Medicaid financing is framed around federal and state government budgets. However, local governments support the safety‐net for indigent residents by assuming a substantial role in the finance and delivery of health care and will likely benefit from this relief.• Our findings indicate higher Medicaid generosity reduces the downstream economic strain on local governments emanating from labor market shocks.• State and federal policy may establish grants to aid local governments during the pandemic, such as in the CARES Act of 2020. However, we establish that the Medicaid program is itself a channel by which state and federal governments can support local governments.","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12298","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43380483","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"General‐Purpose Local Government Defaults: Type, Trend, and Impact","authors":"L. Yang, Yulianti Abbas","doi":"10.1111/pbaf.12266","DOIUrl":"https://doi.org/10.1111/pbaf.12266","url":null,"abstract":"","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12266","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43401203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Public Performance Budgeting: Principles and Practice,\u0000 by\u0000 Elaine Y. Lu and Katherine Willoughby. New York: Routledge, 2019. 204 pages. ISBN 9781138695979.\u0000 City on the Line\u0000 ,\u0000 by Andrew Kleine. New York: Rowman & Littlefield, 2019\u0000 . 279 pages. ISBN 9781538121887.","authors":"William C. Rivenbark","doi":"10.1111/pbaf.12254","DOIUrl":"https://doi.org/10.1111/pbaf.12254","url":null,"abstract":"","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12254","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49200805","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Introduction to Symposium: Modern Money Theory and Public Budgeting and Finance","authors":"J. Douglas, R. Kravchuk","doi":"10.1111/pbaf.12253","DOIUrl":"https://doi.org/10.1111/pbaf.12253","url":null,"abstract":"","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12253","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41952154","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper tests if charter school finance policies influence charter school location. I create a theoretical framework describing the location incentives created by charter school finance provisions and test their relevance empirically by applying a two‐step approach consisting of negative binomial models and Wald tests. Using data from New York, North Carolina, Florida, Michigan, and Ohio, I provide evidence that states’ finance provisions are an important policy lever impacting charter school location. Several robustness checks corroborate the initial results.
{"title":"The Influence of Finance Policies on Charter School Supply Decisions in Five States","authors":"Christian Buerger","doi":"10.1111/pbaf.12263","DOIUrl":"https://doi.org/10.1111/pbaf.12263","url":null,"abstract":"This paper tests if charter school finance policies influence charter school location. I create a theoretical framework describing the location incentives created by charter school finance provisions and test their relevance empirically by applying a two‐step approach consisting of negative binomial models and Wald tests. Using data from New York, North Carolina, Florida, Michigan, and Ohio, I provide evidence that states’ finance provisions are an important policy lever impacting charter school location. Several robustness checks corroborate the initial results.","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12263","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44192281","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Can Needs‐Based Grants Improve Local Transit Performance? Varying Effects by Level of Control","authors":"Obed Pasha, T. Poister","doi":"10.1111/pbaf.12252","DOIUrl":"https://doi.org/10.1111/pbaf.12252","url":null,"abstract":"","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12252","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47611656","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Interlocal collaboration is considered an important tool for cost‐saving. States, therefore, have incentivized interlocal collaboration in different ways. To understand the budgetary consequences of interlocal collaboration and state incentives, we examine counties in Nebraska where the State uses two incentive mechanisms—resource restrictions and additional access to restricted revenues granted to counties with collaboration. This study finds that county expenditures are lower when they spend more through collaboration. While this lower spending is related to lower revenues in counties less constrained by state restrictions, the results for counties more constrained are unclear. State incentive structures may matter for such variations.
{"title":"Interlocal Collaboration and Local Fiscal Structure: Do State Incentives Matter?","authors":"Sungho Park, Craig S. Maher, C. Ebdon","doi":"10.1111/pbaf.12250","DOIUrl":"https://doi.org/10.1111/pbaf.12250","url":null,"abstract":"Interlocal collaboration is considered an important tool for cost‐saving. States, therefore, have incentivized interlocal collaboration in different ways. To understand the budgetary consequences of interlocal collaboration and state incentives, we examine counties in Nebraska where the State uses two incentive mechanisms—resource restrictions and additional access to restricted revenues granted to counties with collaboration. This study finds that county expenditures are lower when they spend more through collaboration. While this lower spending is related to lower revenues in counties less constrained by state restrictions, the results for counties more constrained are unclear. State incentive structures may matter for such variations.","PeriodicalId":46065,"journal":{"name":"Public Budgeting and Finance","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1111/pbaf.12250","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44224290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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