The impact of the Great Recession and the housing crisis on the financing of America's largest cities
The housing crisis and the recession have placed tremendous fiscal pressure on the nation's central cities. Cuts in state government fiscal assistance to their local governments, plus shrinking property tax bases are challenging the ability of local governments to continue their current levels of public services. In this paper, we use data on the financing of the nation's largest central cities from 1997 to 2008 to forecast the impact of the recession and the housing crisis on central city expenditures between 2009 and 2013. Because expenditure responsibilities vary among city governments and because overlying governments play different roles, we develop the concept of constructed governments in order to allow us to compare the revenue-raising and spending policies of large central cities. We predict that real per capita spending in the average central city will be reduced by about seven percent during the forecast period, and that spending cuts will be substantially greater in cities hit hardest by the economic recession and the housing market collapse.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James Alm & Robert D. Buschman & David L. Sjoquist, 2012.
"Rethinking Local Government Reliance on the Property Tax,"
1215, Tulane University, Department of Economics.
- Alm, James & Buschman, Robert D. & Sjoquist, David L., 2011. "Rethinking local government reliance on the property tax," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 320-331, July.
- Ciccone, Antonio & Hall, Robert E, 1996.
"Productivity and the Density of Economic Activity,"
American Economic Review,
American Economic Association, vol. 86(1), pages 54-70, March.
- Antonio Ciccone & Robert E. Hall, 1993. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
- Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
- Skidmore, Mark & Scorsone, Eric, 2011. "Causes and consequences of fiscal stress in Michigan cities," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 360-371, July.
- Byron F. Lutz & Raven S. Molloy & Hui Shan, 2010.
"The housing crisis and state and local government tax revenue: five channels,"
Finance and Economics Discussion Series
2010-49, Board of Governors of the Federal Reserve System (U.S.).
- Lutz, Byron & Molloy, Raven & Shan, Hui, 2011. "The housing crisis and state and local government tax revenue: Five channels," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 306-319, July.
- Lutz, Byron F., 2008. "The Connection Between House Price Appreciation and Property Tax Revenues," National Tax Journal, National Tax Association, vol. 61(3), pages 555-72, September.
- Doerner, William M. & Ihlanfeldt, Keith R., 2011. "House prices and city revenues," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 332-342, July.
- Byron F. Lutz, 2008. "The connection between house price appreciation and property tax revenues," Finance and Economics Discussion Series 2008-48, Board of Governors of the Federal Reserve System (U.S.).
- repec:fip:fedgsq:y:2011:x:5 is not listed on IDEAS
- David L. Sjoquist & Mary Beth Walker & Sally Wallace, 2005. "Estimating Differential Responses to Local Fiscal Conditions: A Mixture Model Analysis," Public Finance Review, , vol. 33(1), pages 36-61, January.
When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:41:y:2011:i:4:p:372-381. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.