 Debt and taxes: Fiscal strain and US city budgets during the Great DepressionJames Siodla () Explorations in Economic History, 2020, vol. 76, issue C Abstract: Although municipal budgets fared well on average during the Great Depression, many suffered greatly. In newspapers and trade publications, observers blamed distress in real estate markets as well as the rise in tax delinquency and real debt obligations. This paper uses a sample of large US cities to estimate how those factors influenced municipal revenue and expenditures during the Depression. Results show that city finances were stable when facing the housing market distress that plagued many urban areas in the 1930s. The principal elements of fiscal strain were actually rising delinquency, which was associated with diminished revenue and operating expenditures, and growing real debt obligations, which were associated with reduced capital outlays. Thus local budgets were driven more by the behavior of taxpayers and obligations to city creditors than by the downturn in real estate markets. These findings illuminate municipal governments’ responses to the fiscal strain wrought by the Depression. Keywords: Great Depression; Housing; Municipal debt; Municipal finances; Tax delinquency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:76:y:2020:i:c:s0014498320300140 DOI: 10.1016/j.eeh.2020.101328 Access Statistics for this article Explorations in Economic History is currently edited by R.H. Steckel More articles in Explorations in Economic History from Elsevier |
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