Paying for Planning

This book chapter highlights the impacts of the 2007-2009 recession on local government spending across the U.S., drawing from the FiSC database. Four regressions were presented to map the change in the four largest revenue categories; property taxes on average taking about three years to respond to housing price changes. K-12 education bore the brunt of the local government expenditure cuts; public pensions, healthcare costs, and intergovernmental transfers see delayed changes and employment in the local government in the most recent recession took over six years to return to normal. While variation was found from city to city due to different local housing prices and incomes, these two economic factors were six times more important in explaining variations in revenue declines than differences in revenue structure.