Subnational Government Tools for Budget Stabilization

Yilin Hou
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Yilin Hou: University of Georgia

Chapter Chapter 3 in State Government Budget Stabilization, 2013, pp 31-73 from Springer

Abstract: Abstract The two major policy tools for budget stabilization at the subnational level are general fund surplus (GFS) and budget stabilization funds (BSF); this chapter elaborates on these two tools with regard to their definitions, working mechanisms, data sources, and changing patterns over their evolution in the past half century. The chapter starts with general fund surplus as the informal policy tool, then treats budget stabilization funds as the formal policy tool. The chapter pays more attention to BSF, providing details on their enabling legislation, structural features, and diffusion across US states over time. Early research of subnational budget stabilization did not provide concise definitions of concepts used nor paid due attention to the enabling legislations of BSFs; the couplet of the two aspects partly contributed to confusion and difficulty in data mining. This chapter clearly defines GFS and BSF and offers detailed analyses of state BSF legislations and reliable data sources using a unique data source and collection method. BSF structural features are classified into purposes, funding sources, balance caps, and use-approval procedures. This chapter also analyzes the trends of GFS and BSF balances from 1979 to 1999, thereby laying a solid foundation for empirical work in the rest of the book.

Keywords: Cash Flow; Ordinary Little Square Model; Generally Accept Accounting Principle; General Fund; Balance Level (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/978-1-4614-6061-9_3

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