This event will be the last presentation of the SPP Research Seminar Series for Fall 2020. Dr. Luke Spreen, an Assistant Professor within the School of Public Policy, will be presenting his research. As usual, the session is meant to be informal and collegial. The expectation is for interactive engagement with the speaker and each other.
Abstract: Many states possess the authority to intervene in local fiscal emergencies, in some cases curtailing decision-making powers of local officials through the appointment of an emergency financial manager. Previous research recognizes that these managers can push through unpopular reforms that may improve financial health but come at the expense of local control and democratic accountability. In this paper, we assess financial outcomes following eight recent state takeovers relative to a counterfactual comprised of similarly distressed municipalities. The staggered difference-in-differences analysis shows emergency managers balance local budgets primarily by reducing general fund expenditures. Managers also oversaw deterioration in long-term indicators resulting from significant increases in liabilities. Overall, municipalities that experienced a state takeover were not significantly better off than counterfactual governments years after local control was restored. The results call into question the efficacy of state takeovers as a response to local fiscal emergencies.