Author ORCID Identifier

https://orcid.org/0000-0001-6624-1841

Date of Award

Spring 1-2025

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Public Management and Policy

First Advisor

Benedict Jimenez

Second Advisor

Ross Rubenstein

Third Advisor

Jorge Martinez-Vazquez

Fourth Advisor

Daniel Kreisman

Abstract

This dissertation examines a series of topics in fiscal federalism and local public finance that concerns the interaction between state institutions and local fiscal policymaking in the US context. The three essays contribute novel theoretical insights and empirical findings to key topics in public finance. Additionally, they offer policy implications and empirical evidence relevant to ongoing debates in public budgeting and finance. The first essay focuses on a state infrastructure financing agency: State Infrastructure Banks (SIBs), and municipal governments’ adoption of the innovative finance tool provided by SIB. This agency typically provides low cost and low risk loans and credit enhancements to local government in financing transportation projects. However, the products of SIBs are still rarely used by local communities. This study investigates the determinants of local government adoption of SIB loans. Using loan application data of all Pennsylvania municipalities from 2008 to 2015, I find that that infrastructure demands, prior experiences, and neighboring adoptions are all positively associated with municipalities’ likelihood of applying for SIB loans as well as the intensity of loan usage, whereas fund balance reduces the probability of applying for SIB loans. I also find that as fund balance increases, the positive impact of infrastructure demands diminishes. The second essay examines how counties adjusted their tax levy over time in response to a one-time privatization windfall using the natural experiment of the 2006 Indiana Toll Road lease. Taking advantage of the variation in grant distribution and using causal inference methods like synthetic control and difference-in-differences, I find that the windfall grant was not returned to local residents as tax relief, which fits the flypaper effect literature. In addition, I also find a crowd out effect of the windfall grants on local capital expenditures. The coexistence of the flypaper effects and the crowd-out effect of one-time intergovernmental grant can be explained by the fact that the windfall money was shared by overlapping local governments, which diluted the any stimulative effects of the grant. The third essay, titled “Does Having Taxing Authority Help School Districts in Managing Expenditure Volatility,” investigates whether taxing autonomy improves school districts' capacity to manage expenditure volatility. This study employs education finance data from the National Center for Education Statistics (NCES) and uses the Great Recession as an external shock in a DID analysis, as the Great Recession led to significant cuts in state education funding to local school districts. The results show that school districts with high and full taxing autonomy had higher current expenditures than school districts with no taxing autonomy during the Great Recession. They achieved this because those school districts collected higher property tax revenues than the amount of property tax revenues received by districts with no marginal control over their tax revenues.

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