An analysis of the effect of home rule on the fiscal health variables and financial management practices of Pennsylvania third-class cities

摘要

This research examines the effect of home rule upon the fiscal health and financial management practices of Pennsylvania third class cities. Pennsylvania home rule is a local government option to determine organizational design, services and taxation with limited state control. A third class city is one of several municipal government classifications. Systems theory provides the basis for comparison, reform literature is used to establish expected changes caused by home rule implementation. Expected change is improved fiscal health related to the extent to which reform is implemented.;The research design compares a treatment group (consisting of 5 home rule cities) and a control group (non-home rule cities). Cluster analysis is used to identify the control group using socio-economic and demographic variables. After control cities are matched with treatment cities, an evaluation of change in fiscal health is performed. Analysis of matched pairs (one home rule and one non-home rule city) is performed for the five pairs identified.;Interrupted time series regression analysis examines 18 fiscal health variables for each pair of cities. Interruption of the data is the period of home rule adoption. Regression analysis uses the coefficients of correlation and unstandardized regression. Results focus on the unstandardized regression coefficient (slope) to measure change between time periods, cities and pairs of cities. Examination of the correlation coefficient measures direction and amount of change in fiscal health. The conclusion is that, in the time period examined, home rule cities exhibited improvements in both slopes and strength for the variables examined.;Case examination was performed for two pairs of cities. One pair represented predicted results, while the second pair exhibited unexpected results. Case study examined documents and records to evaluate financial management including fiscal practices and policies. Case study supports the regression analysis findings.;Three conclusions are reached. First, home rule cities display improvements in fiscal health variables compared to non-home rule cities. Second, improvement is related to the level of consolidation of financial management responsibilities under the chief executive officer. Third, improvement is not dependent upon the appointment of a trained professional manager versus an elected mayor.