Local Government Capital Spending During and After Recessions: A cause for concern?

This article combines literature on cutback management with the results of a survey of county commissioners. Specifically, it focuses on the use of capital spending reductions in county government to cope with fiscal stress and the potential long-term impact of such reductions in response to the limited amount of research on this form of local government. In light of the literature and survey results, it recommends that county governments change their behavior and avoid cuts to their capital budgets due to the long-term costs of delayed maintenance and the opportunity costs incurred by stifling economic development. It also presents policy choices available to many counties that enable them to maintain capital investments, including public-private partnerships and earmarked local option sales taxes. The study concludes with a call for quantitative research on the long-term effects of capital reductions during economic downturns.