Fiscal Strain and Decision Making in Local Government

The literature on decision-making in public organizations is replete with debate on how they pursue expenditure reductions in conditions of fiscal strain. Typically, their strategies are described as being either "across-the-board" or "targeted" and that these strategies are employed for both political and organizational reasons. This dissertation supports the concept that practitioners' responses to fiscal strain are likely to encompass both strategies. Florida counties' fiscal decision making is analyzed in this dissertation by applying the Hirschman-Herfindahl Index (HHI) to statutorily mandated uniform classifications of expenditures, adjusted for inflation and population growth. Changes in the mean and median HHI values during and following the implementation of the state's Amendment 1 tax and expenditure limitation are compared to the HHIs for preceding years. Descriptive analysis employing socio-economic, demographic, and organizational differences portray the effects of fiscal strain on counties' expenditure decision strategies. This dissertation uses a Most Similar Systems Comparative Design, minimizing the extent to which experimental variables affect the outcomes of analysis. Its underlying premise is that Florida counties' response to fiscal strain is comparable to one another and derives from their mutual commitment to a statutorily regulated budgeting and accounting system in response to revenue decreases of a known scale imposed on a specific date. Functionally, it postulates the use of different expenditure reduction strategies in response to fiscal strain is evident when observed from the viewpoints of the (macro) programmatic perspective and the contrasting (micro) perspective of individual objects of expenditure.