Cities on the Brink: The Dynamics of Fiscal Retrenchment

Research on fiscal retrenchment at the local government level has been severely hampered by limited data on city finances after the Great Recession of 2007-09. This research will present the results of the Municipal Fiscal Retrenchment and Recovery (MFRR) survey, which targeted municipal governments with a population of 50,000 or more, and was implemented from March to June 2015. The MFFR survey targeted appointed managers and budget or finance directors, and had a response rate of approximately 40%. The survey gathered information about different aspects of the fiscal retrenchment and recovery process in city governments. The results show that most cities faced a serious budget crisis in 2009 and 2010. The most frequently cited cause of the crisis was the Great Recession, followed by structural issues such as rapidly increasing expenditures, reliance on a few revenue sources, and tax and expenditure limits, among others. In responding to the budget crisis, cities relied more on expenditure cutting strategies in comparison with revenue-raising approaches. Have cities fully recovered their fiscal health? More than five years after the end of the Great Recession, a large majority–seven out of ten cities–reports that they are on the precipice of another budget crisis. This lecture is the first in a yearlong series that is part of the campaign to promote municipal fiscal health.

Benedict S. Jimenez (PhD, University of Illinois) is Assistant Professor in the Department of Political Science at Northeastern University. He is the recipient of the Clarence N. Stone Scholar Award and the Paul A. Volcker Junior Scholar Award from the American Political Science Association, and the 2009 Donald C. Stone Junior Scholar Award from the American Society for Public Administration. Formerly a faculty member at Rutgers University, his research examines how sub-national governments finance, manage and provide local public goods. Benedict is currently directing a research project that examines how fiscal, institutional, and organizational variables influence the process and outcomes of fiscal retrenchment in cities after the 2007-09 Great Recession. His research has been published in top public administration, public policy, and public budgeting and finance journals such as the Journal of Public Administration Research and Theory, Public Administration Review, and Urban Affairs Review, among others.