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- Title
Do budget Maneuvers reduce future budget resiliency? Evidence from states following the great recession.
- Authors
Stavick, John
- Abstract
Conventional wisdom suggests budget maneuvers threaten long‐term structural balance because they transfer resources from the future to the present by non‐transparent means. Budget maneuvers remain poorly understood in part because they are more difficult to observe than traditional tax and expenditure changes to remedy budget deficits. In this research, a taxonomy of budget maneuvers influenced by the recent work of the Volcker Alliance and other public budgeting scholars is used to create an original tally of maneuvers used by U.S. state governments during the Great Recession. Ten states implemented more than half of documented budget maneuver use during that era, while incidence of maneuver use for the remaining 40 states is largely limited to transfers of balances from cash funds. This supports NASBO's contention that maneuvers are not a primary budget‐balancing instrument for most states. This research then presents the postrecession trajectories of four states that relied heavily on maneuvers—California, Connecticut, Illinois, and Wisconsin. While California and Wisconsin largely curtailed the use of budget maneuvers after the Great Recession, Connecticut and Illinois continued to implement them as they remained mired in subsequent budget crises. Key Takeaways: This research presents a long‐run follow‐up of states that used budget maneuvers to manage budget deficits during the Great Recession using a qualitative approach to identify cases of maneuver use.Although maneuvers are rightfully criticized as a nontransparent means of borrowing, this activity is neither widespread nor strongly predicts a state's trajectory of expenditure growth after the end of a fiscal crisis.Most documented budget maneuver use during the Great Recession is limited to a small number of states: Ten states adopted more than half of all documented budget maneuvers, while most budget maneuver use among the remaining forty states was limited to cash fund transfers.Four states that heavily implemented budget maneuvers during the Great Recession followed divergent paths in the years afterwards. California implemented significant reforms to its budgetary institutions that appear to have improved its fiscal circumstances. Illinois and Connecticut continued to muddle through ongoing budget crises. Changes in the political control of Wisconsin resulted in shifts from maneuvers to budget cuts.
- Subjects
WISCONSIN; CONNECTICUT; ILLINOIS; BUDGET; GREAT Recession, 2008-2013; BUDGET cuts; TAX expenditures; BUDGET deficits; CONSUMPTION tax; BUDGET process; SCHOOL budgets
- Publication
Public Budgeting & Finance, 2023, Vol 43, Issue 4, p44
- ISSN
0275-1100
- Publication type
Article
- DOI
10.1111/pbaf.12352