Municipal Expenditures Research Articles

Public Financing of Professional Sports Facilities and Drug Asset Forfeiture

Local governments provide many crucial services from limited budgets, yet often subsidize the profitable, private businesses in professional sports leagues in the United States. Policing represents one important public service. Policing typically constitutes large portions of government budgets and also generates revenue through fines and forfeitures. Existing evidence suggests that large municipal expenditures in other areas can have an ambiguous effect on policing outcomes. This paper addresses the question of whether large public expenditures on sports facilities affect drug asset forfeiture using two-way fixed effects (TWFE) and generalized dynamic model specifications (GDMS). The results are similar across estimation methods, with static TWFE results suggesting a treatment effect of $1,274–5,589 in additional forfeiture per million in subsidies and results from the newer GDMS estimators suggesting $7,703 per million in subsidies. The results imply that, beyond generating no tangible local economic benefits, public subsidization of sports facilities also leads police to make up budget shortfalls by more aggressive policing, which has important implications for racial equity.

Mass Political Information on Social Media: Facebook Ads, Electorate Saturation, and Electoral Accountability in Mexico

Abstract Social media’s capacity to quickly and inexpensively reach large audiences almost simultaneously has the potential to promote electoral accountability. Beyond increasing direct exposure to information, high saturation campaigns—which target substantial fractions of an electorate—may induce or amplify information diffusion, persuasion, or coordination between voters. Randomizing saturation across municipalities, we evaluate the electoral impact of non-partisan Facebook ads informing millions of Mexican citizens of municipal expenditure irregularities in 2018. The vote shares of incumbent parties that engaged in zero/negligible irregularities increased by 6–7 percentage points in directly-targeted electoral precincts. This direct effect, but also the indirect effect in untargeted precincts within treated municipalities, were significantly greater where ads targeted 80%—rather than 20%—of the municipal electorate. The amplifying effects of high saturation campaigns are driven by citizens within more socially-connected municipalities, rather than responses by politicians or media outlets. These findings demonstrate how mass media can ignite social interactions to promote political accountability.

Effects of parliamentary amendments on municipal financing of primary health care in the Brazilian Unified National Health System

This study aims to analyze the effects of the expansion of the federal transfer of parliamentary amendments for municipal financing of primary health care (PHC) in the Brazilian Unified National Health System (SUS), from 2015 to 2020. A longitudinal study was conducted using secondary data on transfers of parliamentary amendments from the Brazilian Ministry of Health and expenditure of municipalities' own resources on public health actions and services and PHC. The effect of the transfer of parliamentary amendments on municipal financing was verified in a stratified way by population size of the municipalities, using generalized estimating equation models. The transfer of parliamentary amendments for PHC showed a large discrepancy in per capita values among municipalities of different population sizes. No correlation with municipal spending on public health actions and services was observed in municipalities with more than 10,000 inhabitants, and the association with spending on PHC (p < 0.050) was inverse in all municipalities. Therefore, the increase in the transfer of parliamentary amendments by the Brazilian Ministry of Health favored a reduction in the allocation of municipal revenues to PHC, which may have been directed to other spending purposes in the SUS. These changes seem to represent priorities established for municipal budget expenditure, which have repercussions on local conditions for guaranteeing stable funding for PHC in Brazil.

Measuring local public expenditure effectiveness using sustainable development goals

PurposeThis paper aims to propose a tool to assess local public expenditure effectiveness based on a framework of alignment between outputs, outcomes and impacts – the Index of Municipal Expenditure Effectiveness (IMEE). This index is composed of a set of indicators associated with the typology of local expenditure.Design/methodology/approachThe paper describes the methodological approach used in the development of the Index, considering the insights from the literature review and the opinion of a panel of experts. The indicators of outcomes and social impacts that are part of the Index are intentionally aligned with the UN Sustainable Development Goals (SDGs) as they provide an essential guide to assess public value creation in the current context. For simplicity purposes, three main components of municipal expenditure were considered, namely Education, Essential Public Services and Local Public Transportation. The Index is then illustrated through a pilot application, using data from five Portuguese municipalities.FindingsThis study argues that measuring the public expenditure effectiveness based on outcome and impact indicators can provide the data needed for local governments to better understand the effects of their activities over time, ultimately assessing their contribution to public value.Practical implicationsAssessing the impact of local spending is important to ensure the best use of public resources. Linking local public expenditures with the 2030 Agenda and the SDGs is a promising avenue to understand up to what extent the application of the public money is contributing to create public value by impacting on citizens’ lives.Originality/valueThe proposed IMEE contributes to addressing a gap identified in public organizations, including local governments, regarding the lack of consideration of expenditure and outcome/impact relationships, and the use of variables to measure long term impacts.

Does low urban density increase municipal expenditure? Population density as a performance target for compact city planning in Japan

In depopulating cities, vacant houses and lots are common throughout the urban area, creating low-density urban areas that can lead to inefficiencies in public services and financial deterioration for municipalities. However, despite some studies demonstrating the relationship between population density and public expenditure, no generalized conclusion regarding the essential effect of reducing public expenditure has been reached. Consequently, no method for rationally setting a population density as a performance target for municipalities when developing compact city planning has been established. Thus, this study used the cross-sectional data from Japanese municipalities and the exponentiation regression equation, to determine the strong relationship between population density and per-person public expenditure (PPPE). The findings are particularly noteworthy for municipalities that grew under a nationwide uniform city planning and accounting system, as they provide valuable insights into the generalization of the public expenditure reduction effect. Furthermore, this study developed a method using the exponentiation regression equation, which demonstrated an L-shaped trajectory indicating that PPPE increases at an accelerating rate when population density falls below a certain threshold. Municipalities can evaluate the efficiency of public expenditure simply by applying their population density to the regression equation. They can also verify population density as a performance target. Furthermore, this study revealed the turning point of population density at which the acceleration in the increase in PPPE begins, implying that municipalities can expect a grace period until the turning point.

Environmental Management Expenditure and Fiscal Sustainability of South African Urban Municipalities: A Panel Data Model

Globally, instituting good environmental management practices within cities in developing countries is a climate-induced risk mitigation strategy. It is, however, an opportunity for local municipalities to achieve fiscal sustainability objectives and environmentally responsible decisions. Cash-constrained local municipalities are characterized by failures to balance environmental and financial needs, resulting in complex urban sustainability challenges. Therefore, this article examines the relationship between environmental management expenditure and fiscal sustainability (FS) in South African local municipalities to contribute to the debate concerning the sustainability of environmental protection projects in local municipalities. The study employed ordinary least squares and feasible generalized least squares to estimate coefficients of linear regression equations involving data collected from 30 local municipalities from 2012 to 2021. The results suggest that only wastewater and environmental protection expenditures positively impact FS, with solid waste management expenditure influencing the FS negatively. Lessons from the research will assist policymakers and municipal administrators in addressing environmental policy incoherence for the improved financial viability of environmental protection projects. Lastly, future research can focus on environmental data collection and reporting for improved and informed environmental protection decisions.

Local Governments and Governance: Analysis of Budget Expenditures of Municipalities by Category in Türkiye with TOPSIS Method (2006-2019)

Türkiye’nin ekonomik yapısında; 2000’lerde mekânsal biçimin ölçeklendirilmesi sürecinde yerel yönetimlerin yeniden yapılanmasıyla idari-mali dönüşümler yaşanmaktadır. Yerel düzeydeki toplumsal aktörler arasındaki ilişkiler ekonomik büyüme içinde önemli mali potansiyele sahip olmaktadır. Burada, yönetişim modeli kapsamında sosyo-mekânsal dinamiklere paralel olarak yerel yönetimler maliyesinin düzeyi, miktarı ve ölçümü ile cari transfer harcamaları analitik olarak ortaya koyulmaktadır. Bu doğrultuda, mekânsal biçimin ölçeklendirilmesine yerel yönetimler maliyesi üzerinden toplumsal değişim sürecindeki ilişkileri anlamak için ampirik yaklaşımla bakılmaktadır. Böylece, 2006-2019 dönemi için TOPSIS yöntemi ile büyükşehir belediyeleri, büyükşehir dışındaki il belediyeleri ile ilçe ve belde belediyeleri gider bütçeleri karşılaştırmalı olarak incelenmiştir. Sonuçta, 2000’li yıllarda yerel yönetimler maliyesinin; belediyelerin bütçe giderleri (cari transferler) özelinde merkezileşen konumuna odaklanarak, sosyo-mekânsal yaklaşıma katkıda bulunulması hedeflenmektedir.

From the municipality of Lisbon to the crown: discourse and practices in the correspondence about the administration of municipal expenditure (1707-1750)

This article falls within the study of power relations in the context of municipal finances during the early modern period. Historiography has demonstrated that decisions and negotiations between different spheres of power are an important part of financial administration. Thus, this article proposes an analysis of those relations/interactions through the discourse and practices in the correspondence between the municipal administration of Lisbon (the capital of Portugal) and the King D. João V about the management of the city’s expenditure, from 1707 to 1750. The first part of this study refers to a documental selection to analyse the processing of the consultas (petitions) submitted by the city council of Lisbon to the King. This analysis puts forward an explanation of how these documents are structured and assesses the crown’s response time (or the lack of response at all). The second part looks into specific examples of municipal administrative discourses in the context of Lisbon’s city council consultas (petitions). At the same time, decisions/responses of the central administration regarding financial needs from the Portuguese crown and/or the municipality of Lisbon will be discussed. The study of these decision-making circuits highlights bureaucratic and negotiation processes unfolding in constant communication and proximity between the municipality of Lisbon and the Portuguese central administration, especially when it came to the resolution of conflicts arising from insufficient municipal funds. The records also reveal the discourses of different officers in the Lisbon municipal administration as they advance arguments, interpretations, and solutions in the context of the local management of expenditure.

Impact of the ageing of populations on local government revenues and expenditures

Ageing populations are a challenge for public finances. The problem is recognised better at country than at local level. This study aims to analyse the impact of the ageing of populations on the revenues and expenditures of Polish municipalities, as well as on their most important components. The author performed an econometric analysis (fixed effects regression) of panel data for 2,414 municipalities between 2004 and 2019. The data for the study was obtained from budgetary statements of Polish municipalities collected by the Ministry of Finance. It was preceded by an international literature review and an analysis of demographic changes in municipalities. The demographic data came from the Local Data Bank of Statistics Poland. The study positively verified the hypothesis that if the proportion of elderly citizens in a municipality increases, the local budget shrinks. A decrease in revenues and spending per capita was observed, which could mean that in ageing municipalities, citizens receive fewer and/or lower-quality public services. Since public services are in greater demand among lowerincome and less self-supporting citizens, they will be influenced by the cutting of local budgets to the largest extent. The study showed that ageing municipalities tend to spend less on care homes than those where the proportion of the elderly is smaller, even though this form of care is particularly needed in ageing communities. It means that the ageing problem might deepen horizontal inequalities between municipalities. Preventing this from happening requires effective local strategies in addition to a well-devised central policy.

Early design evaluation of low-rise school building morphology on energy performance: Climatic contexts of Southeast Europe

Contemporary societies have shifted their focus towards sustainable and resilient public buildings, transcending the institutional and functional role of the physical structures. School buildings remain the second highest expenditure of municipalities' total running costs. The impact on well-being and improved knowledge, and the average lifespan of school buildings, imply the necessity to pay special attention to its expected performance from the early design phase.The present research aims to estimate the impact of early design evaluation of open-school building morphology on energy performance in four climatic contexts of Southeast Europe. Design variables, including building shape and orientation, are selected for a comprehensive whole-building energy performance analysis. The results highlight the method's efficiency in reducing a maximum of 35.4% of the annual energy demand and increasing a maximum of 1.21 °C the thermal comfort in classrooms through geometry optimization. Suggestions are made on the appropriateness level of each typology for each studied climatic context. A fundamental framework for early design decision-making stages is generated through the performed simulation results.

Does land conservation raise property taxes? Evidence from New England cities and towns

Protected lands provide high ecological and social value, yet a perception that land protection erodes local property tax bases and shifts tax burdens to other owners creates barriers for new protection. We investigate the impact of land protection on local property tax rates using panel data from more than 1400 towns and cities in New England between 1990 and 2015, including both ownership and easement-based protection. We find that on average, new protection results in a small increase in annual tax rates, with an expected change of $0.0231 per $1000 of value for a 1 percentage point increase in the percent of municipal area protected. This corresponds to an increase in a homeowner's annual property tax bill of $1.16 per $100,000 of value for 100 acres of new land protection. We do not find that taxes continue to increase over time or reduce municipal expenditures. However, for towns that are growing slowly, have lower household incomes, or use municipal land protection, we estimate greater tax bill increases of up to $10 for each $100,000 of value. These results provide evidence that land protection does not have a substantial impact on property taxes, but also highlight the importance of maintaining and expanding public compensation mechanisms, such as payments in lieu of taxes, where expected burdens from new protection may be greater.

Perceptions of the Exemption Policy on Maternal Mothers Healthcare Service Delivery in Iringa Municipality, Tanzania

This article presents perceptions on the effect of the user-fees exemption policy on maternal mothers in Iringa Municipality, in Iringa, Tanzania. It specifically presents outcomes of the policy on healthcare services offered to maternal mothers. The study employed a cross-sectional research design, with a purposively selected sample of 74 respondents. Data was collected through questionnaires, in-depth interviews, and documentary review; and analysed descriptively and thematically. The results indicated that, on the one hand, the policy increased equal chances in accessing health services among maternal mothers; increased the number of deliveries in health facilities; reduced the number of maternal deaths and uncertainty of delivery for maternal mothers; and improved chances of survival and the overall health of maternal mothers and their babies. On the other hand, the policy tempted unlawful payments; increased household’s dependency on the government; increased municipal expenditure; led to the shortage of beds, drugs as well as skilled health workers; and invited indirect costs. Despite all these challenges, the exemption policy was important as access to health services for maternal mothers improved greatly. Based on the study results, it is recommended that unlawful payments should be controlled; municipal expenditure budget, hospital beds, drugs, and skilled health workers be increased; and indirect costs be minimized.

Municipal resources to promote adult physical activity - a multilevel follow-up study

BackgroundIn Finland, local authorities (municipalities) provide many services, including sports and physical activity facilities such as pedestrian and bicycle ways and lanes, parks, sports arenas and pools. This study aimed to determine whether local authorities can promote physical activity by allocating resources to physical activity facilities.MethodsThe data on municipality expenditure on physical activity and sports, number of sports associations receiving subsidies from the municipality, kilometers of ways for pedestrians and bicycles and hectares of parks in 1999 and 2010 were gathered from national registers. These data were combined using unique municipal codes with individual survey data on leisure-time physical activity (N = 3193) and commuting physical activity (N = 1394). Panel data on physical activity originated from a national health survey, the Health 2000 study, conducted in 2000–2001 and 2011–2012. We used the data of persons who answered the physical activity questions twice and had the same place of residence in both years. In the data, the individuals are nested within municipalities, and multilevel analyses could therefore be applied. The data comprised a two-wave panel and the individuals were followed over 11 years.ResultsThe resources for physical activity varied between municipalities and years. Municipal expenditure for physical activity and total kilometers of pedestrian ways increased significantly during the 11 years, although a clear decrease was observed in individuals’ physical activity. In our models, individual characteristics including higher education level (OR 1.87) and better health status (OR 7.29) increased the odds of increasing physical activity. Female gender was associated with lower (OR 0.83) leisure-time physical activity. Living in rural areas (OR 0.37) decreased commuting physical activity, and age (OR 1.05) increased it. Women (OR 3.16) engaged in commuting physical activity more than men.ConclusionsIndividual-level factors were more important for physical activity than local resources. A large part of the variation in physical activity occurs between individuals, which suggests that some factors not detected in this study explain a large part of the overall variation in physical activity.

Is public official training effective at reducing costs? Evidence from survey data on Japanese municipal mergers

The purpose of this paper is to identify the fiscal effects of public official training after municipal mergers. We apply propensity score matching with the difference-in-differences method by using survey data on municipal mergers in Japan. Additionally, we investigate which types of public official training affect municipal expenditures. We focus on training for specific departments. Our main contribution is the finding that while the municipalities that implement public official training after mergers decrease personnel expenses for a few years although it does not affect total expenditure. In addition, training for specific departments decreases personnel expenses in the short term. Thus, training for specific departments is slightly effective.

The effect of absolute versus relative temperature on health and the role of social care.

We investigate the effect of extreme temperatures on mortality and emergency hospital admissions, and whether local social care allows to mitigate their adverse effects. We merge monthly administrative data on mortality and hospital discharge from Italian municipalities for the period 2001–2015 with daily data on local weather conditions, and yearly data on disaggregated municipal expenditure. We compare two different measures of temperature shocks, one using the conventional approach based on absolute levels (without accounting for regional heterogeneity) and the other based on deviations from local mean temperatures. The former approach shows noisy evidence of an increase in mortality due to extremely hot days while the latter approach shows a large increase in mortality and hospital admissions for cardiovascular and respiratory diseases due to both cold and hot days. These effects are mostly driven by the oldest age group and partially by young children. Then, we report evidence of a mitigating effect of social expenditure on the impact of extremely hot and cold days on both emergency hospital admission and mortality rates. A back of the envelope calculation suggests that the additional social care expenditure is fully compensated by the benefits arising from the lower impact of temperature shocks.

Examining the fiscal impact of tax and expenditure limitations on municipal governments: a rule design approach

ABSTRACT The effect of state fiscal restrictions on local governments is often debatable. While the institutional heterogeneity of such controls is often thought to generate variations in outcomes, more theoretical and empirical attention is imperative. This study aims to address the needs with a particular focus on state-imposed tax and expenditure limitations on municipal governments (municipal TELs), one of the long-standing forms of state pre-emption in the United States. Specifically, it adopts a rule design approach to institutions to capture different institutional designs of municipal TELs, and disentangles their impacts on municipal revenues and expenditures. The results of this study extend the extant literature, suggesting that the fiscal impact of municipal TELs, and more broadly fiscal restrictions, is dependent upon their rule design rather than their presence or stringency.

Kierunki wydatkowania środków w ramach funduszy sołeckich w latach 2010–2021 ze szczególnym uwzględnieniem województwa dolnośląskiego

Purpose – The purpose of this paper is to analyze the change in the directions of spending within the framework of village funds over the years 2010–2021indicated by the residents of municipalities. Research method – A descriptive method with elements of analysis of reporting data from databases of the Ministry of Finance on expenditure of municipalities within the village funds was used in this paper. Results – On the basis of the research, directions of spending within the framework of the village funds in selected municipalities (sections 921, 926, 900, 600, 750, 754 and 801) were identified. The main ones were expenditures from sections 921 and 900, but there were significant fluctuations in their level and frequency of occurrence in individual municipalities in the long term. Large differences in the share of expenditures of individual departments in successive years may suggest that residents submitted for financing the projects that were most important to them at a given moment. Originality/value/implications/recommendations – The analysis is the first attempt in the literature to assess changes in the directions of spending at the level of individual municipalities over such a long period. It indicates that the analysis of the direction of spending of the village funds should not refer to short periods of time, primarily due to the observed fluctuations in the level of these expenditures in different years. At the same time, it indicates the necessity of further detailed research on long-term changes in the direction of expenditures from these funds at the level of the villages (sołectwo) themselves.

Health expenditures and causa mortis: an investigation on municipalities of the State of Paraná, Brazil.

The Brazilian government shares the responsibility of financing public health among federal, state, and municipal levels. Health expenditures are thus uneven across the country and cannot contribute equally to health outcomes across disease categories. This study aims to identify how the health expenditures of municipalities affect the mortality rate in the state of Paraná by causa mortis. We considered years of life lost for each municipality, the chapters of the International Classification of Diseases (10th revision), and the elasticity of this measure in relation to public health expenditure. Considering the possibility of endogeneity, this study follows the instrumental variable approach in a panel of generalized method of moments - instrumental variable (GMM-IV) with fixed effects. Our results show that a 1% increase in health expenditure could decrease the average number of years lost specifically for some causes from 0.176% to 1.56% at the municipal level. These findings could elucidate policy perspective within state finance.

Assessment of the effectiveness of tax expenditures of municipalities for ensuring economic security and development of the territories of St. Petersburg

The subject of the study is the expenditures of local budgets of municipalities of St. Petersburg on economic security and development of territories. Goal. Analysis of the effectiveness of spending budget funds to create safe and favorable living conditions for the population in various administrative districts of St. Petersburg. The scope of the results. The results of the work. Based on the correlation analysis, it was found that there is a close direct correlation between income from tax revenues and expenditures on national security and law enforcement, housing and communal services, education, culture, cinematography, physical culture and sports, social policy: correlation coefficient r = 0.81. The results obtained can be used in assessing and forecasting the effectiveness of tax expenditures in the development of the territory and ensuring the economic security of the metropolis. Methodology. The methods of economic and mathematical modeling, correlation analysis, normalization of indicators by reducing the dimensional scale to a dimensionless one, expert evaluation, comparative studies, and the results of sociological surveys were used. Novelty. An approach is proposed to assess the effectiveness of tax expenditures based on statistical data on the main indicators of the local budget and the results of sociological surveys of the population on the level of security in the territory of the metropolis. The proposed methodology for assessing the effectiveness of tax expenditures allows us to take into account objective and subjective indicators of the direction of the city's tax policy and can be used to assess the tax aspect of the city's economic security. Conclusions. On the basis of the developed methodological apparatus, practical studies of the sufficiency of tax revenues for security expenses, social services, housing and communal services in the districts of St. Petersburg were carried out. The conclusions are specified for each of the territories of the city.

Assessing the 2019 Redesign of Bulgarian Fiscal Equalization System

In many countries the narrowing of horizontal fiscal imbalance at local government level is an important issue of national fiscal policy. Large fiscal disparities at municipal level could lead either to lower service levels in fiscally poor regions or to higher tax rates for similar service levels in these regions. In turn, this could thwart efforts to reduce inequality in income distribution between individuals or could induce fiscally inefficient migration of business and individuals. Since the launch of fiscal decentralization reforms in Bulgaria in 2003 part of central government grants system for municipalities has been the equalization grant aimed at financing a minimum level of local services delivery. The equalization formula has undergone many changes during the years, and the last one was implemented in 2019. The main focus of the current study is to compare the equalizing effect of the equalization schemes applied in Bulgaria in 2018 and 2019. In order to test whether the 2018 and 2019 distribution formulas carry an equalizing effect with respect to municipal expenditure needs, per capita transfers received is regressed on three variables or indicators reflecting the differences in the municipal expenditure needs. Our results show that the new equalization mechanism as of 2019 is better designed to capture the differences in municipal expenditure needs and to alleviate fiscal disparities at local level when compared to the mechanism applied in 2018.