Michael W. Sances

State Fiscal Policy during the Great Recession Budgetary Impacts and Policy Responses

Plunging tax revenues and soaring social program demand during the Great Recession created state budget shortfalls of historic magnitude. After reviewing states’ aggregate reaction to the economic downturn, we conduct an original analysis of the recession’s budgetary impact on the states and their policy responses. Economic factors such as falling personal income and home values explain much of the variation in the recession’s impact. State budgeting rules and practices conditioned states’ experiences, but not always as intended: budget gaps were smaller in states with stricter balanced budget requirements, but larger in states with statutory spending limitations. Personal income tax increases were more likely in states with a Democratic legislature or greater public unionization rates, while midyear spending cuts were smaller in states with larger public sector unions. In sum, we find that while states’ objective economic situations determined the bulk of their responses to the Great Recession, political factors determined these responses’ shape and form.

Who Pays for Government? Descriptive Representation and Exploitative Revenue Sources

We examine US city governments’ use of fines and court fees for local revenue, a policy that disproportionately affects black voters, and the connections between this policy and black representation. Using data on over 9,000 cities, we show that the use of fines as revenue is common and that it is robustly related to the share of city residents who are black. We also find that black representation on city councils diminishes the connection between black population and fines revenue. Our findings speak to the potential of descriptive representation to alleviate biases in city policy.

Attribution Errors in Federalist Systems: When Voters Punish the President for Local Tax Increases

How do voters attribute blame when policy responsibility is shared? While central to accountability, this question is difficult to answer because “who does what” is often ambiguous. This article exploits a case where policy responsibility is unambiguous: local tax referendums. Although presidents have no control over property taxes or the decision to raise local rates, I find that voters punish the president’s party for tax increases enacted via direct democracy. This effect is robust to adjusting for population-based measures of the local economy, as well as panel and discontinuity designs to account for unobserved factors. The effect varies with the magnitude of the tax increase but not with local economic performance, suggesting that voters react to the change in spending money, as opposed to being “primed” to consider national issues. Thus, voters punish officials not only for events that no one controls but also for policies that voters themselves enact.

The Politics of Policy: The Initial Mass Political Effects of Medicaid Expansion in the States

Whether public policy affects electoral politics is an enduring question with an elusive answer. We identify the impact of the highly contested Patient Protection and Affordable Care Act (ACA) of 2010 by exploiting cross-state variation created by the 2012 Supreme Court decision in National Federation of Independent Business v. Sebelius. We compare changes in registration and turnout following the expansion of Medicaid in January of 2014 to show that counties in expansion states experience higher political participation compared to similar counties in nonexpansion states. Importantly, the increases we identify are concentrated in counties with the largest percentage of eligible beneficiaries. The effect on voter registration persists through the 2016 election, but an impact on voter turnout is only evident in 2014. Despite the partisan politics surrounding the ACA–a political environment that differs markedly from social programs producing policy feedbacks in the past—our evidence is broadly consistent with claims that social policy programs can produce some political impacts, at least in the short-term.

Is Money in Politics Harming Trust in Government? Evidence from Two Survey Experiments

Campaign finance policy in the United States is founded on key assumptions about how voters use information about money to evaluate candidates and institutions. In one view, voters use information about campaign contributions as informative signals of a candidate’s policy views, leading to better informed voters; in another view, contributions signal the potential for government corruption, leading to more cynical voters. Despite the prominence of these views in theoretical and policy debates, empirical evidence is scarce. To circumvent issues with existing observational studies, and to speak more directly to policy debates, I present the results of two survey experiments where I randomly vary voters’ information about money in politics in mock election campaigns. My results support the view that campaign contributions allow voters to better place candidates on an ideological spectrum. In contrast, I find only limited evidence that contributions depress voters’ trust in government.

The Distributional Impact of Greater Responsiveness: Evidence from New York Towns

Making leaders more responsive to voters is a frequent goal of institutional reforms in democracies. Given that some citizens participate more in politics than others, however, there is a risk that increased responsiveness may conflict with another democratic value: the equality of policy outcomes. This article studies this trade-off using institutional reforms in New York towns, where officials known as assessors are charged with ensuring equitable treatment in property taxation. Over time, hundreds of towns reduced responsiveness by making their assessors appointed instead of elected. The local context thus allows for more precise measurement of who gets what from government, as well as more credible estimates of the effects of institutions. Results show that local policy decisions are biased against low-income residents and that elections serve only to compound this bias.

Exploitative Revenues, Law Enforcement, and the Quality of Government Service

A growing body of evidence indicates that local police departments are being used to provide revenue for municipalities by imposing and collecting fees, fines, and asset forfeitures. We examine whether revenue collection activities compromise the criminal investigation functions of local police departments. We find that police departments in cities that collect a greater share of their revenue from fees solve violent and property crimes at significantly lower rates. The effect on violent crime clearance is more salient in smaller cities where police officers’ assignments tend not to be highly specialized. We find that this relationship is robust to a variety of empirical strategies, including instrumenting for fines revenue using commuting time. Our results suggest that institutional changes—such as decreasing municipal government reliance on fines and fees for revenue—are important for changing police behavior and improving the provision of public safety.

Something for Something: How and Why Direct Democracy Impacts Service Quality

Does direct democracy affect the quality of government services? Numerous studies find that direct democracy reduces government revenues, but whether this reflects lower quality services, or simply reduced waste, is unknown. I use a local government reform to estimate the effect of mandatory tax referendums on both revenues and service quality, here measured using fire department response times. The introduction of referendums reduces revenue growth by 1.8%, while also increasing response times by half a minute. An analysis of precinct-level service utilization and electoral behavior suggests that this effect is driven not by voter myopia, but by selfinterest. Poor precincts, which are six times as likely to experience a structure fire, are also six times as likely to vote to increase taxes. Consistent with the precinct-level results, the effects of referendums are smallest in the poorest districts, and are largest in the wealthiest districts.