Debt and the Local Economy: Problems in Benchmarking Local Government Debt Affordability

15 Pages Posted: 20 Feb 2003

See all articles by W. Bartley Hildreth

W. Bartley Hildreth

Georgia State University - Andrew Young School of Policy Studies

Gerald J. Miller

Rutgers, The State University of New Jersey - Public Administration

Abstract

Debt creation imposes an obligation to repay borrowed funds from a wealth base that for most local governments is capitalized in property values. Therefore, the ability to afford debt is tied to the local economy, a factor often overlooked by localities in the analyses of their own position. However, debt levels are also relative, as the many debt affordability studies among governments and by bond rating agencies suggest. We argue here that economic concentration and interjurisdictional coordination fundamentally provide a broader analytical approach to the question a locality asks: Can we afford more debt?

Suggested Citation

Hildreth, W. Bartley and Miller, Gerald Joseph, Debt and the Local Economy: Problems in Benchmarking Local Government Debt Affordability. Public Budgeting and Finance, Vol. 22, pp. 99-113, 2002. Available at SSRN: https://ssrn.com/abstract=371437

W. Bartley Hildreth (Contact Author)

Georgia State University - Andrew Young School of Policy Studies ( email )

14 Marietta Street, NW
Atlanta, GA 30303-3992
United States
404-413-0271 (Phone)

Gerald Joseph Miller

Rutgers, The State University of New Jersey - Public Administration ( email )

Newark, NJ
United States

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