Fiscal Decisions Research Articles

Creating a culture of assessment in student affairs to inform practices, priorities, and fiscal decisions utilizing the CAS standards framework at small institutions

AbstractDoing more with less is a continual dynamic faced by leaders in higher education, particularly within small institutions where resources can be scarce, and professionals often are wearing multiple hats. The ability to prioritize programs and services in student affairs rises to the forefront of our work every day. As a result, leaders often need to make strategic decisions regarding what to continue, what to sunset, and how to invest in new innovations to promote student success. This article will focus on strategies for student affairs professionals at small institutions to make and implement decisions regarding our work by building a culture of assessment within student affairs through the utilization of the Council for Advancement of Standards (CAS) standards to inform the strategic prioritization of limited resources.

Higher Education Institutions’ Credit Loss Recognition

The current expected credit loss (CECL) accounting guidance represents a forward-looking methodology for determining credit loss provisions by private colleges and universities’ lending activities beginning with fiscal year 2023-2024. The discussion presents information regarding the types and amounts of lending activities private colleges and universities engage in and the rationale of their lending programs. Provisions of the accounting guidance together implementation decisions, processes, and disclosures are part of the review. The study concludes with the accounting guidance’s impact on higher education fiscal decision making, financial reporting, and the ramifications of the guidance to provide useful information to both higher education management and financial statement users.

Independent Fiscal Institutions as a Part of European Traditions

Fiscal councils are independent public institutions aiming to promote the sustainability of public finances through various functions, such as assessing budgetary plans and their implementation or preparing budgetary and macroeconomic forecasts. Thus, synthesising the attempts made in the literature to define the concept of independent fiscal institutions, it should be emphasised that by providing an independent, impartial and objective assessment of fiscal policy and performance, they promote sound fiscal decisions and sustainable public finances. Independent fiscal institutions also reduce information asymmetries and promote transparency in public finances, thereby raising the reputation and electoral costs for governments that pursue imprudent policies or breach key commitments. As such, they can support contemporary states in addressing the tendency to increase spending and deficits. To better understand the contemporary factual and normative state of the analysed dissertation topic, it is worth tracing, even in some summary, the process of emergence and the directions of development and evolution of independent fiscal institutions. Although independent fiscal institutions are relatively new bodies in the political architecture of the vast majority of the EU Member States, a small group of countries pioneered the creation of these institutions. It is necessary to trace the systemic solutions that have determined the legal and constitutional status of fiscal institutions in recent decades in order to understand the factors that have led to their reassessment.

A Smart Approach For Budget Deficits PredictionUnder Economic Shocks

Historically, the main behavior of fiscal policy is to distribute resources, income, and expenditures, which are interconnected functions of economic stability. Recently, the scope of public sector economics has expanded beyond budgetary components in parallel with the development of public finance. While the budget reached the economic division form of budget items based on program and performance theories, Budget monitoring, and financial risk management are currently challenging, particularly in the face of monetary policy uncertainty. Financial institutions are crucially concerned with the stability of public finance in low-income countries (LICs) as it contributes to improved investor confidence and fiscal decision-making. Hence, economists investigated uncertainty shocks and contributed to managing financial risks with global and energy uncertainty indices. Furthermore, the maturity of digital transformation and artificial intelligence financial applications catalyzed scholars to examine its contributions in the fiscal distress prediction field. Hence, this research aims to integrate artificial intelligence into financial performance analysis to bridge the gap in budget forecasting. The study was aimed at proposing an Economics Division Uncertainty approach (EDUA), which combined (ARIMA) and (LSTM) models for time series analysis of Nuclear Material Authority expenditures over the previous five years divided into quarterly periods, to achieve efficiency in spending. The (ARIMA) model’s (ADF) results showed that uncertainty indicators are highly significant. The best (p-value) in the first and second differences in (ARIMA) models is (0.0001) for petroleum items, (0.0001) for solar price rates, (0.001) for the US exchange rate, and (0.003) for electricity price rates, when compared to (EDU_LSTM). Both models have similar accuracy rates, with the best being (EDU_ARIMA) (solar price 97%, USD exchange rate 84%). The second study proposed a composite model of four machine-learning tools to enhance financial performance during financial distress. The study collected (12) indicators from general financial literature and corporate studies, utilizing the (XGBOOST, Random Forest, KNN, and Naïve Bayes) models. Comparing the accuracy results for each model presented different accuracy results in the deep learning models over five years of data. The best accuracy score was for Random Forest at (69%), XGBOOT at (68%), and KNN at (68%). We recommended explainable AI as future research to interpret the budget deficit during the fiscal year period. Keywords: Economic Shocks, Uncertainty, Budget Reliability, Financial Distress Prediction, Artificial Intelligence.

BUDGETTING ANALYSIS USING MACHINE LEARNING

In an era characterized by unparalleled technological progress and pervasive digital integration, the amalgamation of machine learning and mobile applications has instigated a significant transformation in the realm of financial management. This report embarks on a thorough exploration of this revolutionary convergence, elucidating its impact on budget analysis and forecasting, while also laying the groundwork for a future distinguished by heightened fiscal oversight and informed decision-making. The evolution of budget management and financial forecasting has been intricately linked to the ascent of digital technology. As the intricacies of financial challenges confronting individuals, enterprises, and governments continue to evolve, there arises an increasing need for innovative solutions capable of adapting to diverse financial profiles. At the heart of this transformative shift lies the fusion of Flutter, a versatile and user-friendly mobile app development framework, with the predictive capabilities of machine learning, heralding a paradigmatic shift in the domain of budget analysis. This report offers a comprehensive exploration of our project's multifaceted dimensions. From its conceptualization and rationale to the intricate technical architecture and methodologies underpinning its functionality, each aspect is meticulously examined. Throughout this captivating journey, we delve deeply into the realm of data-driven financial prediction, where machine learning algorithms dissect historical spending patterns, illuminating potential future financial trajectories. The Flutter application, meticulously designed to serve as an intuitive gateway to personalized financial insights and effective budget management, occupies a central role in this endeavor. It epitomizes accessibility and ease of use, empowering users from diverse backgrounds to harness the power of data-driven fiscal decision-making. Beyond the technological innovations, this report underscores the paramount importance of ethical considerations. In an era where data privacy and algorithmic fairness are of utmost concern, we adopt a proactive stance in ensuring that our project adheres to the highest ethical standards. Our endeavor transcends mere innovation; it is a commitment to shaping a more inclusive and responsible financial future’s.

Do balanced budget practices of U.S. states make sense? Alternatives from the Eurozone

Purpose The purpose of this article is to challenge the balanced budget practices of U.S. state governments and offer alternatives that may lead to better fiscal, economic and policy outcomes. We contend that the norm of balance may be leading U.S. states to make fiscal decisions that result in less-than-ideal outcomes, especially during economic downturns.Design/methodology/approach This is a normative article. We examine the scholarly evidence regarding balanced budget practices to assess the appropriateness of balanced budget norms. We also examine the fiscal rules followed by Eurozone countries to draw potential lessons for U.S. states.Findings We conclude that state governments should move away from strict norms of budget balance and seek more flexible approaches. We suggest that instead of following strict rules and norms of balance, U.S. states should consider implementing escape clauses, debt and deficit ceilings, and fiscal councils. We also suggest that the Federal Reserve be open to lending directly to states during fiscal crises to ensure that states have access to affordable credit.Originality/value The balanced budget norm has become ingrained in U.S. state budgeting practices, so much so that public officials and scholars alike rarely question it. The novel contribution of our article is to question this practice in a systematic way and propose alternative approaches.

Average Length of Stay, Average Preventable Readmission Rates, and Average Total Cost of Care: Is there a Relationship?

Average Length of Stay (ALOS), Average Preventable Readmission Rates (APRRs), and Average Total Cost of Care (ATCc) were examined to see if any relationship exists among the variables. Secondary data from the Texas Hospital data collection database was used for the study. Out of 379 acute care hospitals in Texas, 65 hospitals were selected for analysis using a G*Power analysis. Demographic analysis, Spearman’s Rank correlation, and Regression Analyses were conducted to explore the relationship. The results of the Spearman’s Rho correlation showed a significant negative relationship between ALOS and ATCc [ALOS – ATCc (rs = - .271, p = .016)], and for APRRs and ATCc, there was no statistically significant relationship [APRRs – ATCc (rs = .065, p = .564)]. The multiple regression analysis showed there was no statistically significant relationship between the variables [ALOS – ARRs – ATCc (F (2,62) = 1.584, p = .211)]. The results showed that ALOS and APRRs do not necessarily predict ATCc. Consequently, based on the study results ATCc is not solely determined by ALOS and APRRs. The absence of a significant relationship between ALOS, APRRs, and ATCc does not necessarily indicate inefficiency in practice or lack of effectiveness. The results showed that there are other mediating factors impacting care that were not assessed in the study that need to be examined carefully which may have implications for practice, research, and methodology. Future research should be considered to determine these moderating factors to better understand the complex relationship between ALOS, APRRs, and ATCc. An understanding of these complex dynamics may inform managerial strategies and help with critical clinical and fiscal decisions in a healthcare setting.
 Keywords: Average Length of Stay, Average Preventable Readmission Rates, Average Total Cost of care

Economic Insights to Optimize Chain of Survival in Emergency Response

Background: Since economics is a social science studying individuals' behavior, it is plausible to employ its relevant concepts to study human behavior in the immediate response of lay citizens towards emergency incidents. In this context, economics has identified three types of policy lags in fiscal decisions that are of great interest to our study: recognition lag, decision lag, and implementation lag. Objectives: This study aims to apply the three policy lags in economics to the concept of ‘chain of survival' (CoS), in the hope of enticing rethinking its first link, and to seek solutions for CoS's optimal activation. Methods: This cross-sectional study explores immediate responses to prehospital emergencies through a global online survey in four languages. It assesses how lay citizens recognize medical emergencies and activate the EMS system. Data is analyzed with SPSS v26 while summarizing qualitative variables via frequencies and percentages. Results: A total of 239 respondents were recruited in the survey from multiple countries. About 32% of the sample had recognition lag 95% CI of [26.3%, 38.2%]. Lower recognition lag scores were significantly associated with male gender, residing in Europe and Oceania, European and North American nationalities, and first aid training in last 5-10 years. Around 70% of our sample had decision lag 95% CI of [63.6%, 75.3%]. The most statistically significant factor contributing to successful decision to calling for an ambulance was prior first aid training. The average implementation lag score was 46%, which was defined as five minutes delay in calling for an ambulance or more. Conclusion: Applying concise terminology to the CoS's first link (i.e. calling EMS) reveals behavioral constrains to an effective and timely activation of the CoS. These findings clarify immediate behaviors at times of emergencies, and inform targeted awareness programs addressing behavioral elements for a successful activation of the EMS system.

COMMUNITY PARTICIPATION IN LOCAL BUDGET MAKING TOWARDS A PARTICIPATORY BUDGETING MODEL

This study explores the role of community participation in local budget making, aiming to develop a model for participatory budgeting that enhances transparency, accountability, and public engagement in fiscal decision-making. Through a mixed-methods approach, the research analyzes the extent and impact of community involvement in local budget processes across various municipalities. The study draws on quantitative data from budgetary records and qualitative insights from interviews with local officials and community members. Findings indicate that increased community participation leads to more equitable and effective budget allocations, aligning public spending with community needs and priorities. The study also identifies barriers to participation, including limited public awareness and institutional resistance. Based on these findings, the study proposes a participatory budgeting model that incorporates structured community input mechanisms, capacity-building initiatives, and policy recommendations to foster greater civic engagement in local budgeting. This model aims to bridge the gap between local governments and their constituents, promoting a more democratic and responsive budgeting process.

Valuing high temperature's fiscal costs: Evidence from China

Developing effective climate governance policies requires a comprehensive understanding of climate change's costs. However, the existing literature investigates the impacts of climate change on the private sector but neglects to evaluate the fiscal costs. Using fiscal data from Chinese county governments and meteorological data from weather stations from 1995–2019, this paper empirically examines the impacts of climate change, represented by changes in extremely high temperatures, on fiscal sustainability. Our results document that extremely high temperatures significantly increase fiscal expenditure and fiscal balance pressures on local governments. Mechanistically, extremely high temperatures have increased public demand for social and health spending, forcing local governments to increase expenditure. This paper reveals the substantial climate risks embedded in the fiscal sector. Local governments should incorporate the fiscal cost of climate change into their decision-making frameworks when making fiscal decisions and recalculate the costs and benefits of mitigation and adaptation policies.

Who makes health governance decisions at the local level? A cross sectional study from primary health facilities in Tanzania.

Lower- and middle-income countries have decentralized decision-making at the community level, as well as community governance structures, to encourage community participation in governance processes, particularly in primary healthcare (PHC). In Tanzania, decentralization resulted in the establishment of Health Facility Governing Committees (HFGCs) to encourage community participation in the governance of primary health facilities to improve the quality and responsiveness of health service delivery. Nonetheless, despite the presence of HFGCs, PHC delivery remains ineffective and of poor quality. It is unclear who makes governance decisions at PHC facilities to ensure that services delivered are of expected quality and respond the community's needs, tastes, and preferences. This paper aims to assess the perspectives of members of the HFGC on who make governance decision in the context of fiscal decentralization. A cross-section design was used to collect both quantitative and qualitative data. A four-multistagesampling technique was adopted to selects regions, council, health facilities, and HFGC members. Respondents who participated in structured questionnaire responses were chosen using proportional sampling, whereas those who participated in in-depth interviews and Focus Group Discussions were chosen using purposive selection. The data was analyzed descriptively and thematically. The study revealed that HFGCs members perceive that governance decisions in primary health facilities are primarily made by the health facility management, and later are presented in HFGCs. As such, HFGCs are used a passively used to justify participation in decision that was already made by the management, which contradict with the principal of decentralization that emphasizes community participation on fiscal decisions. Decentralization of PHC facilities does not guarantee the participation of community members in fiscal decision of their respective primary health facilities through HFGCs. HFGC is passively used governance structure to substitute community participation in primary health facilities'fiscal decisions. Enforcement mechanisms are required to facilitate effective community participation.

Political budget cycle and unfunded pension liabilities in states in the USA

IMPACT Evidence shows that gubernatorial elections affect pension funding in US states. Contrary to expectations, this article shows that pension plans in election and post-election years tend to be better funded. Other political factors, such as partisanship and unionization, also play a role in funding state employees’ pension plans—the higher the level of unionization, the lower the pension funding. Institutional factors, including tax and expenditure limits (TELs), ‘rainy day funds’ (RDFs), and balanced budget requirements (BBRs), also affect pension funding. TELs positively affect pension funding, while the level of RDFs and the stringency of BBRs tend to reduce pension funding. These findings caution state fiscal administrators and state-level policy-makers as they indicate that political factors along with fiscal institutions are important to consider for their long-term impacts on the viability of pension plans. This article informs policy-makers in the USA and in other countries to exercise more caution during election years as electoral politics may affect pension funding. Political factors are critical in making fiscal decisions, and while this study focuses on the USA states, the lessons are equally important for pension administrators and policy-makers in other countries.

Die Ampel muss zum finanzpolitischen Pragmatismus zurückfinden!

Abstract In this article, after a brief sketch of the fiscal strategy of the German Government and the current budgetary situation, it is first argued that the current budget dispute could have been avoided because the coalition essentially created the dispute through two fiscal (mid)decisions last year. Secondly, a few potential pragmatic solutions are pointed out.

Assessing components of uncertainty in demographic forecasts with an application to fiscal sustainability

AbstractWhen the future evolution of demographic processes is described in a stochastic setting, the challenge is to communicate the meaning of forecast uncertainty in an understandable way, to decision makers and public at large. For the purpose of risk communication, a formal setting is developed in which the roles of the demographic processes on point forecasts, and more generally, on predictive distributions, can be elucidated. The communication problem becomes central in fiscal decision making, when eventual forecast errors have differential implications on the value of the policy options being considered. Tax rate that is required to maintain financial sustainability, until a given target year, is used for illustration.

"How Did Local Governments Recover Their Financial Condition? Lessons from Citizen Participation"

This study offers lessons for overcoming future economic crises by examining whether democratic management helped local governments recover their financial condition. During the Great Recession, local governments were forced to make painful decisions regarding increased taxes and user charges, and cuts in public services. Several case studies provide evidence that citizen participation allows localities to increase property taxes as well as cut public services. However, broader, systematic empirical research is lacking. This study found that local governments with participatory budgeting were more likely to improve their financial condition during the Great Recession. The results allow us to identify the role of citizens in fiscal decision-making, offering lessons on how local governments can overcome possible fiscal crises in the future.

Family involvement and proactive tax management behaviour in private family SMEs

PurposeThis paper investigates whether board composition, a family chief executive officer (CEO) and the firm's managerial capabilities affect proactive tax management in family small and medium-sized enterprises (SMEs). The main statement is that the professionalisation of corporate government and management practices explains the difference in tax avoidance behaviour in closely held family SMEs.Design/methodology/approachUsing the 2012 Spanish thin-capitalisation rule as a quasi-experiment, the authors estimate panel regressions with firm fixed effects and robust standard errors. This model represents a triple difference-in-differences combined with propensity score matching (PSM-DID).FindingsAnalysis shows that having a high proportion of non-family board members and a high endowment of managerial capabilities lead to tax liability optimisation in family SMEs. Conversely, familial boards and family SMEs with low managerial capabilities lack enough expertise to weigh the costs of tax avoidance over the benefits, resulting in a reluctance to engage in tax optimisation behaviours. Alike, results show no significant relation between CEO's family affiliation and tax management behaviour.Practical implicationsWhen implementing fiscal policies, the specific needs of family SMEs should be considered, and how these needs interact with corporate governance and managerial mechanisms. Moreover, policymakers need a deeper understanding of family SMEs in order to develop policies appropriate to their characteristics. A more comprehensive knowledge of how family firm heterogeneity affects corporate decisions, such as indebtedness and fiscal decisions, may improve public policies.Originality/valueThis study addresses the issue of tax behaviour in family SMEs in a particular event that implies a specific logic to weigh the pros and cons of each alternative: reducing debt or paying more taxes. This study’s conclusions are based on a model that deals with potential endogeneity problems, which avoids bias in the findings.

Sinek Kâğıdı Etkisine Farklı Bir Yaklaşım: Türkiye’de Büyükşehir Belediyelerinin Borçlanmaları Üzerinden Bir Analiz

Mali transferler, çoğu ülkede mahalli idarelerin başlıca gelir türü olarak kullanılmaktadır. Sözü edilen gelirler ile idareler arasında ortaya çıkması olası gelir eşitsizliklerinin azaltılacağı ve ayrıca mahalli yöneticilerin hizmetlerini aksaklık yaşamadan sürdürebilmeleri için önemli bir kaynak elde edeceği ifade edilmektedir. Ancak sağladıkları faydaların yanında mali araçlara ilişkin mükelleflerin algılarını ve aynı zamanda yöneticilerin yaklaşımlarını değiştirdikleri için mali kararları olumsuz etkileyen sonuçların oluşabileceği de belirtilmektedir. Söz konusu olumsuz etkiler mali yanılsama, sinek kâğıdı etkisi ve ahlaki tehlike kavramları üzerinden incelenmektedir. Nitekim araştırma kapsamında sözü edilen kavramlara ilişkin teorik çerçeveden yola çıkarak Türkiye’de merkezi idare tarafından genel bütçe vergi gelirlerinden aktarılan payların büyükşehir belediyelerinin yöneticilerinin borçlanma kararlarını etkileyip etkilemediğinin test edilmesi amaçlanmaktadır. Bu doğrultuda yöntem olarak Sistem Genelleştirilmiş Momentler Tahmincisi (Sistem GMM) kullanılmış ve 2014-2020 zaman aralığını kapsayan veri seti analiz edilmiştir. Ayrıca genel bütçeden aktarılan payların dışında büyükşehir belediyelerinin borçlanmaları üzerinde etki doğurup doğurmadıkları test edilmek istenen kontrol değişkenleri ile kukla değişkenler de analize katılmıştır. Yapılan analiz sonucunda genel bütçe vergi gelirlerinde yaşanan artışın, büyükşehir belediyelerinin borçlanmalarını artırdığı saptanmıştır. Öte yandan belirlenen kontrol değişkenleri olarak belirlenen yatırım harcamaları, operasyonel denge ve nüfus değişkenlerinin yanında kukla değişken olarak analize katılan ideoloji ile borçlanma arasında anlamlı ilişki olduğu tespit edilmiştir.

Understanding Public Participation as a Mechanism Affecting Government Fiscal Outcomes: Theory and Evidence From Participatory Budgeting

AbstractThis study aims to advance our knowledge about the role of public participation in formulating budgetary decisions of local governments. By focusing on participatory budgeting as a prominent form of public participation in the budgetary process, we posit that participatory budgeting serves two important roles in aligning the fiscal outcomes of local governments with citizen preferences: (1) increased transparency of the local budget and (2) improved budget literacy of citizens. This study investigates a link between participatory budgeting and the fiscal outcomes of local governments by utilizing data drawn from Korean local governments for seven fiscal years. Employing instrumental variable regression to address endogeneity, there is strong evidence that public participation and deliberation during the participatory budgeting process have a positive association with the fiscal balance. There is also weak evidence that the authority delegated to participatory budgeting participants affects the fiscal balance. The findings of this study imply that it is the quality of public participation that matters in holding the government accountable for its fiscal decisions.

ІНСТРУМЕНТАРІЙ ПІДТРИМКИ ВІДТВОРЮВАЛЬНИХ ПРОЦЕСІВ У СІЛЬСЬКОМУ ГОСПОДАРСТВІ УКРАЇНИ В УМОВАХ ВІЙНИ

The purpose of the scientific publication has been determined, to study the existing practice of finding tools for state support of reproductive processes in agriculture in Ukraine during the war. Attention has been paid to the works of scientists and expert practitioners who studied the problems of state support of reproductive processes in agriculture in Ukraine and prospects for their development. It has been noted that the need and adaptation of state support for agricultural development during the war serve as an impetus to substantiate the practical principles of intensifying the reproductive processes of domestic agricultural enterprises and food security of the state. The current practice of using financial tools to support the reproductive processes of agriculture in Ukraine has been summarized into four groups, namely: budget support tools, credit support tools, fiscal support tools, and price support tools. Peculiarities in the application of credit and fiscal technologies to support domestic agricultural enterprises in the conditions of war have been investigated. The components and algorithm of using certain methods and tools to support the reproduction processes of the studied subjects are generalized: soft loan "Available loans 5-7-9%" and military single tax. The top banks that provide loans to agricultural entities under the program "Affordable loans 5-7-9%" have been presented. The package of fiscal decisions adopted by the Government of Ukraine, which will act to normalize the functioning of the economy and financial system in order to preserve the fiscal potential of domestic business during the war, has been summarized. Positive trends in the recovery of business activity of economic entities due to the introduction of measures to support agriculture were noted: the revival of the registration of sole proprietors in the agricultural sector and the highest share of profitable enterprises has been also in the agricultural business. Prospects for further research based on the need for state support of reproductive processes at the stage of consumption of agricultural products have been identified.

Financing Local Government and Development in Canada in the Aftermath of a Global Pandemic: Continuity and Change

In the post-pandemic environment, local governments must confront a challenging fiscal environment. Drawing on insights provided over the years by Richard Bird, the author re-examines certain pervasive themes found in discussions and analysis of municipal finance, such as the merits of benefits-based taxation at the local level, the hierarchical constraints on municipal fiscal decision making, and the reality of a perpetual fiscal crisis at the local level. The underlying issue of having to finance a broad set of expenditures on public services from a narrow revenue base has resulted in intergovernmental tensions and continuing debate over the capacity of the property tax base to meet the demands placed on it. Financing local government can be described in terms of borrowing, spending, and taxing. Each of these areas of municipal fiscal decision making was affected by the COVID-19 pandemic. Borrowing rules remained hierarchically constrained, pressure to increase expenditures grew, and tax and fee-based revenues were adversely affected. Further, it seems likely that the municipal fiscal base will be narrowed given the controversy around development charges. The author uses data from Ontario to illustrate the impact of the pandemic on municipal fiscal health. In addition, the paper includes the Richard Bird Urban Fiscal Health Dashboard to illustrate aspects of the long-run fiscal health of Ontario's local governments. Throughout the paper, the author raises questions that merit further research informed by the perspective that Richard Bird brought to our understanding of the mechanics and implications of local fiscal decision making.