What are the effects of the Great Recession on local governments?

September 11, 2012

A new issue of State and Local Government Review (SLGR) documents the crisis affecting city and county governments following the Great Recession. Published this month, the issue examines the severity and potentially lasting changes brought about by the economic downturn and presents new data collected from local government administrators. The Special Issue of SLGR (published by SAGE), marks its move to a quarterly publication.

The lead article, "Going it Alone: New Survey Data on Economic Recovery Strategies in Local Government" by Bruce J. Perlman and J. Edwin Benton documents the profound challenges facing local governments in this new era. In a survey of 580 city and county governments, nearly half cited budget shortfalls as a top problem. Among other findings, the article reveals that local government managers are:


  • Freezing positions and cutting workforces
  • Trimming pension and health care costs and passing them to employees
  • Lowering service delivery levels, but not imposing many new fees
  • Using technology to reduce costs where possible
  • Receiving added pressure but little help from States and the Federal Government


  • This important new research sheds light on the challenges faced by city and county governments that must provide most basic services. Unlike federal or state governments, these local governments have limited ability to generate revenue and are often mandated to pay for and deliver services by those other governments. As the authors indicate, most local governments have already reduced expenditures and exhausted their resources to generate revenue. Furthermore, several prominent local governments have declared bankruptcy and as this article documents, other local governments may follow suit.

    Other articles in this Special Issue take up complementary themes. In "The 'New Normal' for Local Government," Lawrence L. Martin, Richard Levey, and Jenna Cawley wrote that local governments will face real economic problems as a result of the recession as $225 billion was taken from city and county governments. They recommended a list of options to adjust to the "New Normal," most interestingly, educating the public about trade-offs between having and paying for services.

    In "The Future of Local Government: Will Current Stresses Bring Major, Permanent Changes?" David N. Ammons, Karl W. Smith, and Carl W. Stenberg wrote that the changes caused by the Great Recession are not permanent. Instead, they view the Recession as a result of years of gradual changes in the U.S. local government system and wrote that reductions in spending and employment and changes in government structure and services will not be permanent for most cities.

    Two other articles on local governments' reactions to the crisis complete the issue. Kimberly L. Nelson's article "Municipal Choices during a Recession: Bounded Rationality and Innovation," evaluates the ways governments have responded to Recession-related changes theoretically and empirically, but finds no set patterns, asserting that it is too soon to determine trends. In "Managing through Collaborative Networks: A Twenty-First Century Mandate for Local Government," Michael Abels proposes forming collaborative networks of local governments to employ economies of scale to provide the same or more services with fewer resources.
    -end-
    This Special Issue, titled "The New Normal: Local Governments After the Great Recession" is a collaboration between SLGR and the National Association of Counties and National League of Cities. For access to full texts of the articles, please contact Camille Gamboa at camille.gamboa@sagepub.com.

    State and Local Government Review (SLGR), peer-reviewed and published four times/year, provides a forum for the exchange of ideas among practitioners and academics that contributes to the knowledge and practice of state and local government politics, policy, and management. Of particular interest in SLGR are articles that focus on state and local governments and those that explore the intergovernmental dimensions of public-sector activity.

    SAGE is a leading international publisher of journals, books, and electronic media for academic, educational, and professional markets. Since 1965, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students spanning a wide range of subject areas including business, humanities, social sciences, and science, technology, and medicine. An independent company, SAGE has principal offices in Los Angeles, London, New Delhi, Singapore and Washington DC. www.sagepublications.com

    SAGE

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