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Cutback budgeting: The long-term consequences

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  • Robert Berne
  • Leanna Stiefel

Abstract

This study asks whether short-term cutbacks made during a fiscal crisis become permanent once fiscal conditions improve. Hypotheses are developed to establish a framework for analyzing a time-series data set. These hypotheses address trade-offs between less essential versus more essential services, salaries versus positions, and capital versus operating expenditures. Then long-term consequences are assessed with a longitudinal, comparative case study of the effects of New York City's mid-1970s fiscal crisis on education services in the city. Education services were cut dramatically in 1976 and 1977. The trends in those services, defined in various ways, are compared over time and in relationship to the rest of New York State. We find that less essential services, teacher positions, and capital and maintenance expenditures suffered, relative to more essential services, operating expenditures, and teacher salaries.

Suggested Citation

  • Robert Berne & Leanna Stiefel, 1993. "Cutback budgeting: The long-term consequences," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(4), pages 664-684.
    • Handle: RePEc:wly:jpamgt:v:12:y:1993:i:4:p:664-684
    DOI: 10.2307/3325345
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    References listed on IDEAS

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    3. Robert C. Rickards, 1984. "How the spending patterns of cities change: Budgetary incrementalism reexamined," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 4(1), pages 56-74.
    4. Antos, Joseph R. & Rosen, Sherwin, 1975. "Discrimination in the market for public school teachers," Journal of Econometrics, Elsevier, vol. 3(2), pages 123-150, May.
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    1. Otto, Glenn & Voss, Graham, 1996. "Public Capital and Private Production in Australia," MPRA Paper 52110, University Library of Munich, Germany.
    2. Theodore Arapis & Vincent Reitano & Earl Bruck, 2017. "The Fiscal Savings Behavior of Pennsylvania School Districts Through the Great Recession," Public Budgeting & Finance, Wiley Blackwell, vol. 37(3), pages 47-70, September.
    3. Lavertu, Stéphane & Clair, Travis St., 2018. "Beyond spending levels: Revenue uncertainty and the performance of local governments," Journal of Urban Economics, Elsevier, vol. 106(C), pages 59-80.
    4. Fabrizio Di Mascio & Alessandro Natalini, 2015. "Fiscal Retrenchment in Southern Europe: Changing patterns of public management in Greece, Italy, Portugal and Spain," Public Management Review, Taylor & Francis Journals, vol. 17(1), pages 129-148, January.
    5. Michael Dothan & Fred Thompson, 2009. "A better budget rule," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(3), pages 463-478.

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