Someone to Watch Over me

Abstract

Although the fiscal condition of local governments has been a recent concern for some states, there is considerable ambiguity about what constitutes fiscal difficulties and how to recognize them before they become fiscal emergencies. This article outlines the results of a 50-state survey to identify and classify indicators states use to assess or monitor fiscal conditions in their local governments. The survey revealed that most states did not have such indicators in place, and those that do rarely agree on which indicators to construct. Only 15 states have in place indicators to assess or monitor local financial conditions, and many of these states use indicators that do not identify local problems before they become major. Most indicators used by states are based on operating position variables such as fund balances and are predicated on the assumption that local financial emergencies are management problems rather than the result of longer term trends.

Keywords

fiscal indicators financial emergencies state oversight

References

Advisory Commission on Intergovernmental Relations . (1973). City financial emergencies: The intergovernmental dimension. Washington, DC: Government Printing Office.

Advisory Commission on Intergovernmental Relations . (1985). Bankruptcies, defaults, and other local government financial emergencies. Washington, DC: Government Printing Office.

Berman, D. (1995). Takeovers of local governments: An overview and evaluation of state policies. Publius: The Journal of Federalism, 25(3), 55-70.

Berman, D. (2003). Local government and the states: Autonomy, politics and policy. Armonk, NY: M. E. Sharpe.

Brown, K. W. (1993). The 10-pointtest of financial condition: Toward an easy-to-use assessment tool for smaller cities. Government Finance Review, 9(6), 21-26.

Brown, K. W. (1996). Trends in key ratios using the GFOA financial indicators database 1989-1993. Government Finance Review, 12(6), 30-34.

Cahill, A. G. , & James, J. (1992). Responding to municipal fiscal distress: An emerging issue for state governments in the 1990s. Public Administration Review, 52(1), 88-94.

Dommel, P. R. , & Nathan, R. P. (1978, December). Measuring community distress in the United States. Paper presented at the Seminar on Measuring Local Government Expenditure Needs, Denmark.

Groves, S. M. , & Valente, M. G. (1980). Evaluating financial condition: A handbook for local government. Washington, DC: International City Management Association.

10.

Groves, S. M. , & Valente, M. G. (1994). Evaluating financial condition: A handbook for local government. Washington, DC: International City/County Management Association.

11.

Groves, S. M. , & Valente, M. G. (2003). Evaluating financial condition: A handbook for local government. Washington, DC: International City/County Management Association.

12.

Heimann, C. F. L. (1997). Acceptable risks: Politics, policy, and risky technology. Ann Arbor: University of Michigan Press.

13.

Honadle, B. W. (2003). The states’ role in U.S. local government fiscal crises: A theoretical model and results of a national survey. International Journal of Public Administration, 26(2), 1431-1472.

14.

Kloha, P. , Weissert, C. S. , & Kleine, R. (2005). Developing and testing a new composite model to predict local fiscal distress. Public Administration Review, 65(3), 278-288.

15.

Ladd, H. F. , & Yinger, J. (1989). America’s ailing cities: Fiscal health and the design of urban policy. Baltimore: Johns Hopkins University Press.

16.

Monroe, W. O. (2000). State of Florida local government financial reporting system performance audit. Tallahassee: State of Florida, Auditor General.

17.

Municipal Finance Officers Association . (1978). Is your city heading for financial difficulty? A guidebook for small cities and other governmental units. Chicago: Author.

18.

Pammer, W. J., Jr . (1990). Managing fiscal strain in major American cities: Understanding retrenchment in the public sector. New York: Greenwood.

19.

Reschovsky, A. (1993). Are city fiscal crises on the horizon? In T. R. Swartz & F. J. Bonello (Eds.), Urban finance under siege (pp. 107-137). New York: M. E. Sharpe.

20.

Rubin, I. (1998). Class, tax and power: Municipal budgeting in the United States. Chatham, NJ: Chatham House.

21.

Sjoquist, D. L. (1996, December). Local government fiscal effort. Atlanta: Georgia State University, Andrew Young School of Policy Studies.

22.

Stonecash, J. (1998). The politics of state-local fiscal relations. In R. Hanson (Ed.), Governing partners: State-local relations in the United States. Boulder, CO: Westview.

23.

U.S. Congress .(1978). City need and the responsiveness of federal grant programs. Washington, DC: Congressional Budget Office.

24.

U.S. Department of Treasury . (1978). Report on the fiscal impact of the economic stimulus package on 48 large urban governments. Washington, DC: Government Printing Office.