Raise Taxes, Cut Services, or Lay Off Staff: Citizens in the Fiscal Retrenchment Process

Advocates of citizen participation argue that a greater role for citizens in the budget process can help city governments undergoing fiscal retrenchment by improving budget choices and citizens' willingness to pay, among others. A contrary view suggests that citizens are free riders who want lo...

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Bibliographic Details
Published in:Journal of public administration research and theory 2014-10, Vol.24 (4), p.923-953
Main Author: Jimenez, Benedict S.
Format: Article
Language:English
Subjects:
Budget cuts
Capital budgeting
Citizen participation
Decision analysis
Fiscal policy
Government budgets
Government crises
Layoffs
Local government
Municipal government
Municipal governments
Municipal taxes
Property taxes
Sales taxes
Studies
Tax revenues
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Summary:Advocates of citizen participation argue that a greater role for citizens in the budget process can help city governments undergoing fiscal retrenchment by improving budget choices and citizens' willingness to pay, among others. A contrary view suggests that citizens are free riders who want lower taxes but oppose service cuts. How has citizen input influenced the choice of fiscal retrenchment strategies in municipal governments during the Great Recession? The analysis shows that when it comes to budget cutting, participatory cities have a higher probability of adopting highly contentious strategies, including eliminating services and laying off workers compared with nonparticipatory cities. For raising revenues, participatory cities avoid increasing property taxes. Citizens' fiscal choices raise questions about the future of local autonomy and, ultimately, citizens' ability to influence policymaking in the evolving intergovernmental system.
ISSN:1053-1858
1477-9803
DOI:10.1093/jopart/mut018