Fiscal Health for Local Governments (eBook)

Cover 1
Contents 3
Preface and Acknowledgments 7
Foreword 11
1 Introduction and Overview 17
Scope of the Book and Audience 18
Factors Affecting Local Government Fiscal Health 21
The Fiscal Manager's Situation 26
A Fiscal Capacity Framework 28
Summary 1 28
Discussion Questions 1 30
References 1 31
2 Fiscal Health Literature: Drifts and Reflections 33
What Is Fiscal Health? A Look at the Terminology 33
Influences on Fiscal Health Revisited 38
Measuring Fiscal Health 40
What Governments Do About Fiscal Problems 47
Conclusion 2 49
References 2 49
3 Macro Trends Affecting Local Governments 55
Demographic and Social Trends 56
Telecommunications Infrastructure, Technology, and the Global Economy 62
Institutional and Policy Fragmentation 63
Increased Problem Complexity 66
Increased Demand for Services 68
Increased Citizen, Group and Elected Official Activism 69
Increased Interest in Regional Issues 70
Looming Structural Budget Gaps 71
Conclusions 3 76
Discussion Questions 3 76
References 3 77
4 Financing Trends and Options 81
Fiscal Federalism 82
Size of Government 84
Local Response to the Macro Trends 89
Local Revenue Sources 94
Regional Sprawl and Local Finances 97
Intergovernmental Assistance 99
Gharging Patterns of State Assistance 101
Local Tax Options 102
Property Tax Revisions and Improved Administration 105
User Charges and Fees 108
Restructuring the System of Local Government 110
Public Authorities and Special Districts 111
Tax-Base Sharing 112
Transfer of Powers and Intergovernmental Agreements 114
Trends Interacting with Revenue Diversification 115
Conclusions 4 116
References 4 117
5 Alternative Service Delivery Options 123
Types of ASD Options 125
Percieved Barriers to Intermunicipal Cooperation 129
Assessing ASD Options 137
Contracting Options 141
Subsidy/Fees Options 141
Analysis of Current Operations 143
Cost Comparisons 144
Outsourcing Principles 145
Principles of Successful Contracting 146
Contract Preparation and Negotiation 149
Conclusion 5 151
Discussion Questions 5 152
References 5 152
6 Tools for Analyzing Local Fiscal Health 155
Tool #1: Ten-Point Test of Fiscal Condition 156
Tool #2: Fiscal Capacity Analysis 167
Tool #3: The Financial Trend Monitoring System 176
Conclusion 6 186
Discussion Questions 6 186
References 6 187
Appendix A: Adjusting for Inflation 189
7 Analysis and Interpretation 193
Case Study 1: Glendon County 194
Case Study II: Sharpelle County 199
Case Study III: The City of Meirwood 203
Discussion Questions 7 208
8 Fiscal Effects of Local Government Boundary Adjustments 211
Mixed Lessons from Experience 211
A General Framework 213
A Case Example 215
The Prediction 217
Intergovernmental AId Impact 217
Impact of Consolidation on Debt Burden 219
Property Tax Impact 220
Impact on North Branch Area School District 221
Impact on Costs Associated with Detachment and Annexation 222
Impact of Consolidation on Local Service Costs 222
Impacts on Farmers 225
The Reality 226
Intergovernmental Aid Impact 226
Debt Burden 228
Property Tax Impact 228
Expenditures Since Consolidation 229
Staffing Changes 230
Summary and Conclusions of the Case Study 230
General Considerations 232
Discussion Questions 8 233
References 8 233
9 Practical Strategies for Local Fiscal Health 235
Be More Efficient 244
Expand the Tax Base 245
Reduce the Demand for Services 247
Shift Costs to Nonresidents 248
Secure New Sources of Revenue 249
Increase Spending Flexibility 250
Improve Management of Existing Resources 251
Diversify Revenue Sources 252
Summary and Conclusion 9 253
Discussion Questions 9 254
References 9 255
10 Conclusion 257
References 10 267
About The Authors 269
Index 273