The relationships between public finance issues, financial management issues, and conditions of fiscal stress in small and rural governments: the case of west Virginia

Abstract

Small and rural communities face severe fiscal constraints. Many factors affect governance in these localities. Because of this, a vital concern are the relationships between “Fiscal Stress” and other factors. Multivariate analysis techniques are utilized to examine these relationships based on data collected from a survey of West Virginia local public officials. The analysis showed that “Public Finance” and “Financial Management” factors affect Fiscal Stress while external factors, such as professionalism, population, and metropolitan status, have little to no impact on Fiscal Stress. Additionally, Public Finance and Financial Management issues are critical to explaining Fiscal Stress in small and rural governments and Fiscal Stress is critical in explaining Public Finance and Financial Management issues. However, the relationships are not of equal strength; Fiscal Stress and Public Finance influence each other more strongly than Financial Management factors.