1 zyxwvutsrqponmlkjihgfedcbaZYXWVUT Cutback Budgeting: The Long-Term Consequences zyxw Robert Berne Leanna Stiefel Abstract zyxwvuts This study asks whether short-term cutbacks made during a fiscal crisis become permanent once fiscal conditions improve. Hypotheses are developed to estab- lish 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 conse- quences are assessed with a longitudinal, comparative case study zyxw of the effects of New York City's mid-1 970s 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 o f " York State. We find that less essential services, teacherpositions, and capital and maintenance expenditures suffered relative to more essential services, operating expenditures, and teacher salaries. Many state and local governments, such as those of Connecticut; New Jersey; California; Bridgeport, Connecticut, and New York City, are under- going extreme fiscal distress in the early 1990s. For some, this is not a new experience. Similar fiscal problems in the latter 1970s and early 1980s allowed analysts at that time to study the political and budgeting processes of governments that were cutting back on expenditures. Most commonly these analysts questioned whether Aaron Wildavsky's incremental bud- geting model retained its explanatory power when it was applied to situations of severe cutbacks rather than situations of moderate to large growth in expenditures. [Behn, 1985; Caiden and Chapman, 1982; Glassberg, 1978; Levine, Rubin, and Wolohojian, 198 1; Rickards, 1984; Weinberg, 19841. The resounding answer was that, in the short run, it did not. Cutback budgeting on a yearly basis did not appear to be decremental and across the board, but rather nonmarginal and selective. Journal of Policy Analysis and Management, Vol. 12, No. 4, 664-684 (1993) zyxw 0 1993 b the Association for Public Policy Analysis and Management Publishel by John Wiley & Sons, Inc. CCC 0276-8739/93/040664-2 zyx 1