Cutback Budgeting: The Long-Term Consequences

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Abstract
This study asks whether short-term cutbacks made during a fiscal crisis become permanent once fiscal conditions improve. Hypotheses are developed to establish a framework for analyzing a time-series data set. These hypotheses address trade-offs between less essential versus more essential services, salaries versus positions, and capital versus operating expenditures. Then long-term consequences are assessed with a longitudinal, comparative case study of the effects of New York City's mid-1970s fiscal crisis on education services in the city. Education services were cut dramatically in 1976 and 1977. The trends in those services, defined in various ways, are compared over time and in relationship to the rest of New York State. We find that less essential services, teacher positions, and capital and maintenance expenditures suffered, relative to more essential services, operating expenditures, and teacher salaries.

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