In this article, the circumstances of the Cleveland default and the New York City fiscal crisis are compared. Regression equations for budgetary variables are estimated on a sample of 44 large cities and used to predict the levels of the budgetary variables for Cleveland and New York. Although there is some evidence that New York's expenditures and revenues are both greater than would be predicted for a city with its characteristics, Cleveland's expenditures and revenues were not significantly different from what would be predicted for a city with its characteristics.
Get full access to this article
View all access options for this article.
References
1.
Advisory Commission on Intergovernmental Relations [ACIR] (1980) Significant Features of Fiscal Federalism. Washington, DC: Author.
2.
ARONSON, J. R. and A. E. KING (1978) "Is there a fiscal crisis outside of New York?"National Tax J.31 (June): 153-163.
3.
BAHL, R. W. (1969) "Studies on determinants of public expenditures: a review," pp. 184-207 in S. J. Mushkin and J. F. Cotton, Sharing Federal Funds for State and Local Needs: Grants-in-Aid and PPB Systems. New York: Praeger.
4.
BRAZER, H. E. (1970) "Some fiscal implictions of metropolitanism," pp. 331-345 in W. E. Mitchell and I. Walter (eds.) State and Local Finance. New York: Ronald.
5.
CLARK, T. N. (1977) "Fiscal management of American cities: funds flow indicators."J. of Accounting Research15 (Supplement): 54-106.
6.
Governmental Facts (1979) "Background data on one-half percent Cleveland income tax increase." No. 351 (January 19).
7.
GRAMLICH, E. M. (1976) "The New York City fiscal crisis: what happened and what is to be done?"Amer. Econ. Rev.66 (May): 415-429.
8.
KEAN, S. M. (1979) "Cleveland's financial emergency: description of the short term and long term causes."Washington, DC: Congressional Research Service.
9.
S&MM [Sales and Marketing Management] (1977) Survey of Buying Power, Vol. 119 (July 25).
10.
SALKEVER, D. S. (1976) "The use of dummy variables to compute predictions, prediction errors, and confidence intervals."J. of Econometrics4 (November): 393-397.
11.
SCHNORBUS, R. H. (1981) "Debt management of Ohio's major cities."Federal Reserve Bank of Cleveland Economic Commentary (March 23).
12.
U.S. Department of Commerce (1979) City Government Finances, 1976-1977. Washington, DC: Government Printing Office.
