Your Tax Dollars, Their Excuses: What Makes Citizens Snap!
When our local government announces a budget cut, what makes us either nod in reluctant understanding or grab our pitchforks in protest?
A fascinating new study has cracked the code on why some budget cuts make us see red while others get a grudging pass. Turns out, it's not just about what gets cut, but about who we think messed up in the first place.
Dr. Carla Flink and Dr. Xiaoyang Xu, researchers at the University of South Carolina and Georgetown University, surveyed over 1,600 Americans with an experimental design. They provided a vignette where respondents were asked to review a hypothetical city experiencing budget pressure and then they evaluated the city government’s handling. In doing so, some respondents heard about outside forces, like natural disasters or cuts in state support, while others heard about mismanagement. What they found might surprise your city council. When forces beyond their control like Mother Nature or state budget slashers are to blame for empty coffers, we're surprisingly understanding. But catch a whiff of hometown mismanagement? That's when the patience runs dry.
As the authors explain, “In our study, we designed the blame attribution scenarios based on the source of the budget deficit and government's structure. Specifically, we considered whether the blame comes from within the government or from external factors, indicating how much control the government may have over the deficit. For example, if a budget deficit results from unexpected events such as natural disasters, the government's ability to control it can be limited. On the other side, if a deficit is a result of the mismanagement of funds, the government should have had opportunities to correct the error(s) before it became a larger issue.”
The findings also gave a baseline for public managers to understand how the public evaluates cutback strategies in different blame scenarios. Understandably, government officials and budget officers are focused on the financial outcomes of their decisions. It is shown that those decisions can have impacts on how citizens feel about government in general, which can have further implications for how they engage (or not engage) with government in the future. Having transparent and open communications with the public about financial management decisions can be important for preserving citizen satisfaction and trust in government.
To examine this idea, the researchers similarly experimentally varied the hypothetical city’s budget strategy, which were inspired by four short-term budget strategies the Government Finance Officers Association often recommends: reducing personnel costs, reducing capital spending, reducing materials or contractor costs, and raising revenues. “Overall, we try to select the scenarios that can best reflect the mundane realism” says Flink.
The findings suggest that under different blame scenarios, the public's perceptions and evaluations of budget strategies may also vary. For instance, when government mismanagement is the cause for budget deficit, raising taxes receives the lowest rating from study participants among the four cutback strategies. In contrast, the public is more accepting of tax increases when the deficit is caused by a natural disaster.
Craig Maher, an expert in local government fiscal stress at the University of Nebraska-Omaha who was not directly involved in the study, thought the study adds to our understanding of strategic political calculations and that in some cases it might free up policymakers to be more aggressive than others. “There has been a good deal of interest by researchers in better understanding financial decision-making, particularly during periods of uncertainly, or fiscal stress” explained Maher. “This (study) suggests that in those scenarios (of budget cutting) local officials can be more bold in their actions taken to address the fiscal crisis.”
The big lesson for city leaders? Perhaps it is not to play hide-and-seek with bad news. When the money's tight, people can handle the truth…they just can't handle being played for fools.
The study was published on August 7, 2024 in the journal Public Budgeting and Finance.
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