Research

Peer-Reviewed Research

Stavick, J. (2023). “Do State Budget Maneuvers Reduce Future Budget Resiliency? Evidence Following the Great Recession.” Public Budgeting & Finance 43(4): 44-65. 

Conventional wisdom suggests budget maneuvers threaten long-term structural balance because they transfer resources from the future to the present by non-transparent means. Budget maneuvers remain poorly understood in part because they are more difficult to observe than traditional tax and expenditure changes to remedy budget deficits. In this research, a taxonomy of budget maneuvers influenced by the recent work of the Volcker Alliance and other public budgeting scholars is used to create an original tally of maneuvers used by U.S. state governments during the Great Recession. Ten states implemented more than half of documented budget maneuver use during that era, while incidence of maneuver use for the remaining 40 states is largely limited to transfers of balances from cash funds. This supports NASBO's contention that maneuvers are not a primary budget-balancing instrument for most states. This research then presents the postrecession trajectories of four states that relied heavily on maneuvers—California, Connecticut, Illinois, and Wisconsin. While California and Wisconsin largely curtailed the use of budget maneuvers after the Great Recession, Connecticut and Illinois continued to implement them as they remained mired in subsequent budget crises.

Mikesell, J., Stavick, J., Ross, J. (2023). “Use Tax Administration and Revenue Production in the States.” Public Budgeting & Finance 43(4): 24-43. 

Use taxes are utilized by states to discourage taxpayers from engaging in sales tax avoidance via shopping in lower tax states. Enforcement of this tax has long been difficult, as demonstrated in the case of South Dakota v. Wayfair, Inc. (2018). States have instead relied on different administration and tax structures to generate revenues. We contribute to the limited existing use tax literature by studying a panel of use tax revenues collected from 25 states, as well as use tax collection methods states implement for individual and business taxpayers. States are best at enforcing the use tax where they can rely on complementary administrative tax collection systems, such as in business-to-business transactions. They will likely struggle to realize improved use tax compliance for household consumption even in the wake of the Wayfair ruling.

Research Under Review

Stavick, J. & Tran, H. “Leaving Money on the Table: Nudging Taxpayers to Claim a Refundable State Income Tax Credit.” Currently "revise and resubmit" at Public Finance Review as of November 2024. 

In 2020, Nebraska sought to provide property tax relief through an income tax credit against public school property tax levies. Millions of dollars of the tax credit were offered and went unclaimed. The state responded by mailing notifications to 6,000 taxpayers that informed them of the opportunity to claim the missed credit using a simplified form. Treatment effects estimated using taxpayer microdata show that the credit take-up rate of notified taxpayers was 20 percentage points greater than that of a control group of 9,905 taxpayers that received no contact. Taxpayer subgroups, such as self-preparers, married taxpayers that filed jointly, and rural taxpayers were among the most responsive to notification.

Stavick, J. “Organizational Memory and Snap Back Performance in Public Agencies.” Currently accepted pending minor revisions at American Review of Public Administration as of November 2024.

In recent years, public administration scholars investigated the relationship between employee turnover and public sector performance in settings where tasks are routine and frequently executed. This research builds on that foundation by investigating the contribution of organizational memory to the execution of infrequent and extraordinary tasks, theoretically distinguishing it from routine and ordinary tasks. Using a panel of administrative state employee payroll data collected from 45 states, this research tests the relationship between state health department employee turnover, retention, and performance in response to an emergency: the COVID vaccination campaign of 2021. Results show that recent health department turnover rates are a more substantive predictor than retention of employees with previous SARS H1N1 experience or the employment of managers from that era. Estimates indicate a one percentage point increase in employee turnover rates reduce the two-dose adult vaccine take-up rate by about 0.5 percentage points, a result largely driven by high vaccination rates among senior citizens. The results are robust to alternative specifications and a placebo investigation using transportation department employee turnover rates. I estimate from this data that a 1 percent reduction in turnover would cost about $1.6 billion in additional compensation to state health departments and would produce reduced mortality benefits of $2.1 billion.  

Working Papers

Stavick, J. "Public Employee Furloughs as a Budget Balancing Strategy: Evidence of Effects on Employees and Agencies." 

Many state policy makers pursued furloughs to reduce expenditures and restore balance between revenue and expenditures to comply with balanced budget requirements. Furloughs are often criticized by scholars as a mechanism that inflicts psychological and financial stress on public employees, while others perceive them as a reasonable alternative to layoffs. How sensitive are public employees to furlough-induced pay reductions? This paper implements a novel dataset containing the employee records of all California state employees from 1998-2021 to investigate how state employees responded to its mandatory furlough program implemented in 2009. Although furloughed employees exit public employment more quickly than exempt employees, event studies show weak evidence of an increase in separation rates among furloughed employees relative their exempt colleagues. Two-stage least squares regressions show that the separation elasticity for public employees is about 0.35 for same-year separation, an estimate that implies substantive monopsony power of employer government over public sector workers. However, estimates show that the labor supply response to furloughs grow more elastic in subsequent years, meaning that furloughs may be a sensible short-run tactic to reduce expenditures during a budgetary crisis. 

Research in Progress

Spreen, T.L., Stavick, J., Duncan, D. "Cost of Living Adjustments and Public Workforce Turnover"

U.S. public sector wage growth has lagged that of the private sector since the Great Recession. Anecdotal reports suggest that U.S. state and local governments have struggled to attract and retain qualified workers as a result (Pew Charitable Trusts, 2022). However, there is presently scarce empirical evidence on how cost of living adjustments (COLAs) or other period across-the-board wage increases affect employee turnover in the public or private sectors. We bridge this gap by evaluating the impact of COLAs and other supplemental wage increased allocated to state government workers between 2010 and 2020. We accomplish this using budgeted COLA data compiled by National Association for State Budget Officers paired with state government personnel records assembled from 45 states. The granular nature of our data enable us to examine how COLAs impact employee turnover within specific agencies and functional areas of each state government. This results of this research should offer valuable insight to policy makers by demonstrating the impact of reducing or foregoing annual COLAs on size and quality of public sector workforces. 

Stavick, J., Carr, D. "Do Collective Bargaining Reforms Increase Turnover? Evidence from Wisconsin’s Act 10."

In 2011, the Wisconsin State Legislature enacted Act 10, which provided for sweeping changes to the state’s collective bargaining relationship with its unionized state employees as part of a remedy to a $3.6 billion budget deficit. Among the changes made by Act 10 include limiting the focus of collective bargaining to wages only and cap employee wage increases to the rate of inflation, and they were required to increase the employee share of contributions to the state pension system. We investigate the impact of these collective bargaining reforms on Wisconsin’s public sector workforce. Specifically, we use 675,000 panel observations from a state administrative employee data spanning years 2006-2023 to investigate the impact of the reform on state employee pay, longevity, and turnover. We use the date of employee hire and separation date for each employee to measure whether a statistically significant change exists before and after the policy shock.

Ross, J., Stavick. J., Carlin, P. “Did State Imposed Tax and Expenditure Limits Reduce the Fiscal Size of Local Governments? Revisiting the Evidence.” 

This paper revisits the research question of whether or not state-on-local tax expenditure limits (TELs) reduced the fiscal size of local governments. The often cited research on the subject appeared in the 1990s and early 2000s with the consensus conclusion that these policies did have that consequence, however this literature had many limitations in research design common to the work of that time. We update the data, empirical strategy, and inferential techniques for American city and county governments. First, we clarify that the parameter of interest is an intent-to-treat estimate from a panel regression using the Mullins and Wallin (2004) TEL taxonomy. Second, the universe of local governments of study is known, so we consider randomized treatment standard errors in addition to other common inferential statistics. Finally, we use a cross-state border differencing strategy as an identification strategy. While a simple panel with two-way fixed effects reproduce the large estimates of the previous literature, our preferred estimates from the border discontinuity design indicates these policies are substantially smaller than those provided by the previous literature.