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The Issuance of State and Local Debt During the United States Great Recession

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  • Ronald C. Fisher
  • Robert W. Wassmer

Abstract

This research explores the borrowing behavior of state and local governments between 2008 and 2010, a period that encompasses the Great Recession. State and local governments continued to borrow markedly during this period of severe fiscal stress. Following an overview of state-local debt and subnational government borrowing, we present a statistical analysis of the demographic, economic, political, and institutional factors that influenced interstate differences in borrowing. This research suggests that both economic and political factors influenced borrowing and that the availability of Build America Bonds contributed to an increase in borrowing during this period.

Suggested Citation

  • Ronald C. Fisher & Robert W. Wassmer, 2014. "The Issuance of State and Local Debt During the United States Great Recession," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 113-150, March.
    • Handle: RePEc:ntj:journl:v:67:y:2014:i:1:p:113-150
    DOI: 10.17310/ntj.2014.1.04
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    References listed on IDEAS

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    1. Temple, Judy A., 1993. "Limitations on State and Local Government Borrowing for Private Purposes," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(1), pages 41-52, March.
    2. Phuong Nguyen-Hoang, 2012. "Cost function and its use for intergovernmental educational transfers in Vietnam," Education Economics, Taylor & Francis Journals, vol. 20(1), pages 69-91, June.
    3. Clingermayer, James C. & Dan Wood, B., 1995. "Disentangling Patterns of State Debt Financing," American Political Science Review, Cambridge University Press, vol. 89(1), pages 108-120, March.
    4. James M. Poterba & Jürgen von Hagen, 1999. "Fiscal Institutions and Fiscal Performance," NBER Books, National Bureau of Economic Research, Inc, number pote99-1.
    5. James M. Poterba & Jürgen von Hagen, 1999. "Introduction to "Fiscal Institutions and Fiscal Performance"," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 1-12, National Bureau of Economic Research, Inc.
    6. Temple, Judy A., 1993. "Limitations on State and Local Government Borrowing for Private Purposes," National Tax Journal, National Tax Association, vol. 46(1), pages 41-52, March.
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    Cited by:

    1. Koomin Kim, 2023. "How gubernatorial budgetary power and interest groups affect vertical fiscal imbalances in the US states: Focusing on fiscal centralization and decentralization," Public Budgeting & Finance, Wiley Blackwell, vol. 43(2), pages 53-81, July.
    2. Gao Liu & Dwight V. Denison, 2014. "Indirect and Direct Subsidies for the Cost of Government Capital: Comparing Tax-Exempt Bonds and Build America Bonds," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 569-594, September.
    3. Craig L. Johnson & Tima T. Moldogaziev & Martin J. Luby & Ruth Winecoff, 2021. "The Federal Reserve Municipal Liquidity Facility (MLF): Where the municipal securities market and fed finally meet," Public Budgeting & Finance, Wiley Blackwell, vol. 41(3), pages 42-73, September.
    4. Spencer T. Brien & Wenli Yan, 2020. "Are Overlapping Local Governments Competing With Each Other When Issuing Debt?," Public Budgeting & Finance, Wiley Blackwell, vol. 40(2), pages 75-92, June.
    5. Robert A. Greer & Dwight V. Denison, 2016. "Determinants of Debt Concentration at the State Level," Public Budgeting & Finance, Wiley Blackwell, vol. 36(4), pages 111-130, December.
    6. Michelle L. Lofton & Sharon N. Kioko, 2021. "The use of short‐term debt by general‐purpose governments," Public Budgeting & Finance, Wiley Blackwell, vol. 41(4), pages 71-93, December.

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