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Hudspeth, Nancy; Wellman, Gerard
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-02-2018-0014
PurposePublic transit is an essential service for people without access to an automobile, particularly those who are low income, elderly, or with disabilities. Previous research has found that large urban transit agencies receive less state funding per ride provided than suburban agencies. The paper aims to discuss this issue.Design/methodology/approachUsing data from the National Transit Database for 37 of the largest US transit agencies, the authors create a panel data set of services provided and sources of operating funds for the period 1991-2009. The authors develop an equity index that represents the difference between the share of state funding that an agency receives and the share of the total transit rides in the state that it provides. The authors use fixed-effects regression modeling to examine the determinants of fiscal balance and the equity index.FindingsThe authors find that the share of an agency’s operating funds that come from dedicated taxes is a significant predictor of fiscal health as measured by its fiscal balance; reliance on passenger fares and provision of bus service are significant predictors of operating deficits. The equity index finds that large agencies receive less than their fair share of state transit funding based on ridership.Practical implicationsDedicated tax revenues are a key ingredient to transit agencies’ fiscal stability. Transit agencies’ fiscal condition in states and localities that do not have a dedicated tax could benefit from such a tax.Social implicationsTransit is an essential service for people who are unable to drive or own an automobile; funding inequities maintain old patterns of segregation and isolation for “transit dependents.”Originality/valueThis study supports earlier research finding that large agencies receive less than their fair share of state funding based on ridership. It contributes to the literature on transportation equity and transit finance.
(Wie) Yusuf, Juita-Elena; O’Connell, Lenahan; Chapman, David; M. Jordan, Meagan; Anuar, Khairul Azfi
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-03-2018-0022
PurposeThe purpose of this paper is to examine drivers’ willingness-to-pay (WTP) tolls using data from a survey of drivers in the Hampton Roads region of Southeastern Virginia. The theory of planned behavior is applied to understand the different factors contributing to WTP tolls. The study measures different dimensions of WTP, offers a two-stage approach that aligns correlates of WTP tolls in logical sequence, and assesses the role of price information (toll rates) as an anchor heuristic in WTP.Design/methodology/approachThree WTP measures are elicited via contingent valuation method using three survey questions that incorporate different price information. The study tests the role of price information as an anchor heuristic. WTP is analyzed using a two-stage decision process. Drivers first decide whether, in-principle, to support tolls, followed by the amount they are willing to pay (maximum and peak amounts). Three regression models are run to test the impact of ability to pay on amount WTP, impact of in-principle WTP on maximum WTP, and impact of maximum WTP on peak WTP given an anchor toll rate.FindingsAttitudes supportive of tolls and the ability to pay are predictors of in-principle WTP, while in-principle WTP predicts amount (maximum and peak) WTP. Price information, as an anchor heuristic, reduces variability in amount WTP and conditions the amounts WTP.Originality/valueThe value and originality of this study lie in the application of the theory of planned behavior to study WTP tolls, the use of contingent valuation, and the effect of anchor heuristics.
O’Connell, Lenahan; (Wie) Yusuf, Juita-Elena; Anuar, Khairul Azfi
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-03-2018-0023
PurposeThe purpose of this paper is to compare public preferences for investment and spending on non-automobile infrastructures (mass transit and bicycling) to preferences for new roads and the repair of current highways. The study explores the factors that explain preferences for non-automobile infrastructure using a three-factor model including self-interest (personal transportation benefits), concern for community-wide benefits (political beliefs), and concern for the economic impact. The study uses a case study of the urban context of the Hampton Roads region of Southeastern Virginia (USA).Design/methodology/approachThe analysis uses data from a 2013 telephone survey of urban residents in the Hampton Roads area. Survey respondents were asked to identify their two investment priorities from four options: repairing existing roads, bridges, and tunnels; constructing new or expanding roads, bridges, and tunnels; expanding mass transit; and expanding bicycle routes and improving bike safety.FindingsRepairing existing highway infrastructure is the most popular spending priority (66 percent of residents). There is as much support (46 percent) for investing in non-automobile infrastructure as for investing in new roads, bridges, and tunnels. Significant predictors of support for non-automobile infrastructure, using the three-factor model, are: length of commute time, self-identification as liberal, use of light rail, and a belief that light rail contributes to economic development.Originality/valueThe study examines public preferences for both non-traditional and traditional transportation infrastructure investments. It highlights the factors that contribute to public support for different transportation spending options.
Kim, Jiseul; Chen, Can; Ebdon, Carol
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-06-2018-027
PurposeThe purpose of this paper is to evaluate whether the additional infrastructure information in US state financial statements improves infrastructure quality.Design/methodology/approachBased on institutional theory, the authors developed six models and estimated them on a state panel data set.FindingsThe authors found that the implementation of the Government Accounting Standard Board (GASB) Statement No. 34 improved state highway infrastructure quality, and the states using the modified approach had a larger effect compared to the states using depreciation accounting. The authors further used a two-step path analysis and found that the implementation of GASB 34 indirectly improved highway quality through increasing state highway maintenance expenditures. From the empirical results, the authors conclude that the exercise of collecting and developing systems to track the additional data has provided the opportunity for officials to use the information to prioritize limited funding and improve their asset management practices.Practical implicationsFuture research may extend this research by exploring the detailed micro-mechanisms of how decision makers use infrastructure information in their asset management practices, as well as by increasing the number of years in the panel data set to fully capture changes in behavior.Social implicationsIn addition, governments currently using depreciation should be encouraged to move to the modified approach.Originality/valueThis is the first attempt to empirically examine the effects of GASB 34 on infrastructure condition.
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-02-2018-0012
PurposeRevenue diversification interacting with form of government that has different management behaviors may produce a variation in the level of public spending. The purpose of this paper is to understand how revenue diversification interacts with form of government in determining the level of public spending.Design/methodology/approachA cross-sectional research design with the analysis of interaction effects was employed in order to achieve this research objective. Drawing from the economic and financial management perspectives on revenue diversification, this study proposes the following hypotheses: in the council-manager form, greater revenue diversification leads to less spending; in the mayor-council form, greater revenue diversification leads to more spending; and mayor-council governments with diversified revenues spend more than council-manager governments.FindingsThe regression results support the second and third hypotheses, but not the first hypothesis.Originality/valueThis study offers a robust link between revenue diversification and form of government by examining how their interaction produces a variation in the level of public spending.
Santis, Serena; Grossi, Giuseppe; Bisogno, Marco
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-02-2018-0017
PurposeThe purpose of this paper is to review and analyze the literature on consolidated financial statements (CFS) in the public sector published from 1980 to 2015 in public sector accounting and management journals, and propose a future research agenda.Design/methodology/approachAdopting a structured literature review methodology, the authors investigate how the CFS literature is developing and what its focus is.FindingsThe authors identify five major topics: the definition of the consolidation area; the identification of the reporting entity; the private vs public sector accounting standard dichotomy; the relationship with the statistical rules; and the usefulness of CFS.Originality/valueThe authors analyze these topics, highlighting the growing implementation of CFS in different contexts (mainly focusing on governments outside the USA) and provide suggestions for future research.
Kidwell, Linda; Lowensohn, Suzanne
2018 Journal of Public Budgeting Accounting & Financial Management
doi: 10.1108/JPBAFM-02-2018-0019
PurposeAccounting standards are issued only after a comprehensive due process, which includes opportunities for external constituents to participate via public hearings and comment letters. The purpose of this paper is to identify stakeholders unique to government and evaluate the extent to which they respond to 13 due process documents issued by the Governmental Accounting Standards Board (GASB). The results provide insight into the comment letter element of due process – who participates, in what way do they participate, and why do they participate?Design/methodology/approachComment letters received by the GASB in response to eleven exposure drafts and three preliminary views (PV) documents from 2010-2013 were examined, and respondents were categorized according to Cheng’s (1994) model as modified by Kidwell and Lowensohn (2011), resulting in the following 16 participant types: academics, budget officers, bureaucratic managers, state auditors/controllers, citizens, financial markets, elected officials, external auditors/CPA firms, finance officers, government accountants, government auditors, interest groups, media, professional associations, standard setters, and other governments. The authors next examined responses in favor of and opposed to for each document by group and responses by stakeholder group over time.FindingsThe authors find that participants came from various stakeholder groups. Consistent with findings in different standard-setting environments, the primary financial statement preparers – finance officers – were the most frequent individual respondents; however, there was participation from a wide variety of stakeholders. Responses are generally constructive and relatively consistent in their balance of favorable and unfavorable feedback over time, with a few exceptions. Closer examination of comment letters in response to the financial projections PV document reveals both conceptual and practical considerations underlying respondent participation.Research limitations/implicationsMotivations for participation were discerned from the letter content, but direct data on motivation was not measured, limiting the conclusions to apparent motivation. Future research might examine the extent to which comment letter content is incorporated into the basis of conclusions section of issued standards to assess the direct impact of comment letters on the governmental accounting standard-setting process. It would also be relevant to trace specific projects that advanced from a PV stage to the exposure draft stage to assess whether the proportional participation of these stakeholder groups is different throughout due process.Practical implicationsThe GASB has long been receptive to constituent feedback (Lowensohn, 2000) and can glean useful input from comment letters. By closely examining arguments impounded within comment letters, including conceptual and practical considerations, and by utilizing a more delineated understanding of the stakeholders in governmental accounting standard setting, the Board can better forge into the future.Originality/valueMuch of the extant research documents that stakeholder participation is relatively low, given the number of parties affected by accounting standards. Prior research into both public and private sector accounting standard setting in the USA and abroad has not used all unique actors specific to the public sector. Using a comprehensive stakeholder model designed for the governmental environment, the authors examine who participates in the GASB comment letter process, assess the nature of GASB comment letter participant responses, determine whether relative participation by stakeholder group is relatively constant over time, and consider why the participants respond.
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