Organizational Decline and Fiscal Distress in Municipal Police Agencies

• Author: Matthew J. Giblin,Jeffrey S. Nowacki
• Published date: 01 June 2018
• DOI: 10.1177/1098611117744523
• Date: 01 June 2018
• Subject Matter: Articles

Article

Organizational Decline

and Fiscal Distress

in Municipal

Police Agencies

Matthew J. Giblin

1

and

Jeffrey S. Nowacki

2

Abstract

In late 2007, the United States entered one of the most significant recessions in

recent memory. While the consequences to individuals have been well documented,

less attention has been paid to the effects on state-sponsored organizations such as

police agencies. The current study examines fiscal distress (e.g., layoffs, hiring freezes)

in a sample of large municipal law enforcement agencies. According to a framework

proposed by Levine, departments should be most vulnerable to fiscal distress when

the jurisdiction experiences economic shocks (environmental entropy), the demand

for police services declines (problem depletion), the political system becomes less

supportive of police agencies (political vulnerability), and the organization becomes

more structurally complex (organizational atrophy). Structural equation modeling

results suggest that fiscal distress is driven by the local economic context, changing

crime rates, and organizational size. This research has implications for helping organ-

izations address future economic declines.

Keywords

policing, organizational theory, fiscal distress, recession, cutback management

1

Department of Criminology & Criminal Justice, Southern Illinois University Carbondale, IL, USA

2

Department of Sociology, Colorado State University, Fort Collins, CO, USA

Corresponding Author:

Matthew J. Giblin, Department of Criminology & Criminal Justice, Southern Illinois University

Carbondale, Mail Code 4504, Carbondale, IL 62901, USA.

Email: mgiblin@siu.edu

Police Quarterly

2018, Vol. 21(2) 171–195

!The Author(s) 2017

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DOI: 10.1177/1098611117744523

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The general health of the United States economy ebbs and flows over time.

According to the National Bureau of Economic Research (2012), the United

States suffered through 33 separate recessions between 1857 and 2010. The cyc-

lical nature of the economy suggests that economic distress for individuals

and organizations is inevitable, with contraction occurring approximately

every 17 years and, in recent decades, even more frequently. The recent reces-

sion, the most substantial economic decline since the Great Depression, began in

December 2007 and officially lasted 18 months. Effects typically extend beyond

the official period identified by economists as characterizing the recession.

By late 2009, unemployment rates soared above 10%, more than twice the

level from only a decade earlier, and would remain above 8% until 2012

(Bureau of Labor Statistics, n.d.). Not only did millions of Americans lose

their jobs, they lost their homes and retirement savings as well. Similarly,

many businesses were forced to either scale back or cease operations entirely.

The effects of the Great Recession also permeated the public sector. Cities and

towns struggled to maintain funding for municipal services as property and sales

tax revenues declined because of diminished home prices and decreased spend-

ing, respectively, and federal grant support dried up because of national austerity

measures (Parlow, 2012). The Brookings Institution estimated a loss of nearly

600,000 government jobs between 2009 and 2011, including teachers, first

responders, air-traffic controllers, and other workers (Greenstone & Looney,

2012). Police departments were not immune from the turbulent economic envir-

onment. One estimate placed the number of law enforcement jobs lost at 10,000

positions (Office of Community Oriented Policing Services, 2011). Some local

agencies were, quite simply, decimated by layoffs and furloughs. The Newark,

New Jersey Police Department, for example, faced a nearly $17 million shortfall

in 2010, necessitating the layoffs of 167 of the city’s sworn officers (Queally &

Friedman, 2010). Other agencies cut overtime spending or curtailed salary

increases for agency personnel (Police Executive Research Forum, 2010).

Nearly half of all agencies in a Police Executive Research Forum (2010)

survey indicated that ‘‘services in their community have declined or will decline

due to budget cuts’’ (p. 2).

Based on these accounts, the recession thrusted certain law enforcement agen-

cies into a period of organizational decline marked by declining budgets,

resource scarcity, cutbacks, and financial constraints (Cameron, Kim, &

Whetten, 1987; Cameron, Whetten, & Kim, 1987; Guy, 1989). For some depart-

ment leaders, workforce reductions are likely to be viewed as temporary chal-

lenges dictated by extraordinary economic circumstances (Weitzel & Jonsson,

1989). For others, the turbulent economic environment may have produced

long-term organizational resource declines and a belief that funding levels will

never return to prerecession levels (Druker & Robinson, 1994). Indeed, the

downturn led the Office of Community Oriented Policing Services (2011) to

conclude:

172 Police Quarterly 21(2)