State Budgetary Delays in an Era of Party Polarization

• Author: Nathaniel A. Birkhead
• Date: 01 December 2016
• DOI: 10.1177/0160323X16687813
• Published date: 01 December 2016
• Subject Matter: Articles

Article
State and Local Government Review
2016, Vol. 48(4) 259-269
State Budgetary Delays in an
ª The Author(s) 2017
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Era of Party Polarization
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DOI: 10.1177/0160323X16687813
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Nathaniel A. Birkhead1
Abstract
This article examines the relationship between state budgetary delays and party polarization.
Although others have evaluated the influence of divided government on a state’s likelihood of passing
a budget on time, the influence of party polarization has not been explored. Given the growing rate
of party polarization in the American states, it is important to understand the implications that this
trend has for the budgetary process. The first analysis in this article predicts if a budgetary delay will
occur, and the second evaluates the factors that explain how long the stalemate continues when a
delay occurs.
Keywords
polarization, state budgets, budget delay, state legislatures, political parties
In 2015, the state of Kansas was embroiled in a
relatively common: In each year from 1994 to
budgetary crisis. The fiscal year 2016 budget
2010, at least one state government was late
was due on June 7 or else the state government
in passing a budget. Moreover, state budgetary
would shut down. Tasked with balancing the
delays have attracted scholarly attention for
budget in the face of dwindling state revenues,
some time, both in their analysis of potential
the government was at an impasse. While some
causes and in evaluation of their consequences.
state legislators wanted to raise taxes to help
Surprisingly, however, little of this work has
balance the budget, Governor Brownback
examined the role of political polarization, or
vowed to veto any bill that rolled back his sig-
ideological disagreements between the parties,
nature tax cuts of 2012 (Andres 2015). On June
in this process. Clarke (1998) accounts for
6, rather than passing a budget the legislature
ideological factors of the state parties in analy-
approved a bill that declared all state employ-
ses of disagreements between the legislature
ees essential and thus averted putting state
and governor, but there has been little scholarly
employees on furlough (Clayton and Hanna
attention to party polarization and ability to
2015). It wasn’t until June 12—almost one week
after it was due—that lawmakers successfully
passed a budget and marked the longest legisla-
1 Department of Political Science, Kansas State University,
tive session in state history (Shorman 2015).
Manhattan, KS, USA
To observers of state politics, the details of
this story may be new, but the general points
Corresponding Author:
Nathaniel A. Birkhead, Department of Political Science,
are rather familiar. Governors often engage in
Kansas State University, 802 Mid-campus Drive, 011C
standoffs with their legislature (Kousser and
Calvin Hall, Manhattan, KS 66506, USA.
Phillips 2009, 2012), and late budgets are
Email: birkhead@ksu.edu

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260
State and Local Government Review 48(4)
pass budget on time. This is important because
especially sensitive to budgetary delays
almost party polarization is common in the
(Leachman et al. 2016).
states—nearly half of state governments are
Further, budgetary delays, and the partisan
more polarized than Congress (Shor and
bickering that come along with it, can also
McCarty 2011; McGhee et al. 2014).
damage popular confidence in the state govern-
In addition, the trend of party polarization in
ment. As Klarner, Phillips, and Muckler (2012)
the states is slowly increasing. That is, party
indicate, there are extensive political costs for
polarization and ideological extremism will
fiscal gridlock, as voters’ approval for the
very likely be a characteristic of American pol-
elected branches of government drops dramati-
itics for the foreseeable future, and yet there is
cally following a delay.
not a good understanding for what the implica-
Thus, budgetary delays have negative impli-
tions of partisan conflict are for the budgetary
cations for the state and its citizens in a number
process. Further, party polarization has the
of ways: from the state’s own economic posi-
capacity to depress legislative productivity and
tion and credit rating, to its citizens, to people’s
may increase the likelihood of a budgetary
confidence in the political institutions. Given
delay (Hicks 2015).
the relationship between political polarization
As such, it is appropriate to build a fuller
and legislative gridlock, it is important to
account for what these changes in the party coa-
understand how polarization influences state
litions mean for a state’s ability to pass a budget
budgeting.
on time, as there are numerous costs of a bud-
getary delay. Andersen, Lassen, and Nielsen
(2014) show that when states are delayed in
Why Budgetary Delays Occur
passing budgets, it has negative implications
Political Factors: Partisanship and Ideology
for the states’ bond yield spreads and for its
economy. Not only did the bond yield spread
The majority of the work focusing on political
go up markedly for a thirty-day late budget, but
factors and budgetary delays has primarily
the decay for the one-time effect was slow—
focused on the effect of unified government
with effects still being felt ten years later. Thus,
(i.e., the legislature and governor’s office all
after states are delayed in their budgets once,
controlled by the same party) or divided gov-
they may have more difficulty borrowing and
ernment (i.e., at least one of the legislative
pay a higher rate on debt for nearly a decade.
chambers being controlled by a different party
Even when they do not secure more expen-
than the governor). Although it is important
sive bonds, states can be late in funding their
to account for the political parties in control
obligations—whether they are delayed in mak-
of government, numerous studies of lawmaking
ing their annual required contributions to state
at the state and national level (Krehbiel 1998;
pension plans (Thom and Randazzo 2015) or in
Aldrich and Battista 2002; Bianco and Sened
funding school districts (Dao 1997). This can have
2005) show that the ideological characteristics
dramatic implications for state employees—
of the legislators are equally as important. The
for example, employees at Northeastern Illi-
effects of divided government and ideological
nois University, Eastern Illinois University,
characteristics on legislative productivity are
and Chicago State University have received
detailed below.
layoffs or been furloughed in response to the
Although there is some dissent on the issue
ongoing Illinois state budget impasse (Kuang
(see Mayhew 1991), the majority of work on
2016). Lastly, as local governments are highly
gridlock at the national level finds that divided
dependent on state funds, the impact of state
government depresses a legislature’s ability to
budgetary shortfalls are not limited to state
pass important legislation (Howell et al. 2000;
employees. Local governments in general, and
Binder 2003; Chiou and Rothenberg 2003).
public schools in particular, are typically
Similarly, Bowling and Ferguson (2001) as
dependent on state support and are thus
well as Hicks (2015) find that divided

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Birkhead
261
government reduces legislative output in state
the same party, but the policy views of the med-
government. When focusing specifically on
ian House member differ from the views of the
state budgets, Clarke (1998) as well as Kirkland
median senator, gridlock is more likely. In fact,
and Phillips (2016) show that divided govern-
in her analysis, Binder finds “bicameral dis-
ment increases budgetary conflict and increases
tances have the greatest substantive impact on
the likelihood that a budget will be late. Specif-
the frequency of deadlock” (2003, 70).
ically, Kirkland and Phillips (2016, 4) estimate
Work on state legislatures has supported the
that the simple presence of divided government
conclusion that polarization slows policy out-
increases a state government’s propensity of
put as well. J. R. Rogers (2005) and Hicks
issuing a late budget by 8–13 percent.
(2015) show that polarized parties decrease the
Thus, divided government stymies the bud-
number of bills that become law each year, thus
getary process, both at the national and state
increasing legislative gridlock and slow down
levels. What is unclear from this, however, is
the legislative process. In his analysis of the
if divided government has the same effect in all
legislature’s changes to the governor’s budget-
contexts. In particular, there are some states
ary items, Clarke (1998) shows that unified leg-
like California or Colorado with extremely lib-
islative opposition to the governor, particularly
eral Democrats and extremely conservative
when there is a large ideological spread
Republicans in office. Here, divided govern-
between the parties, increases the likelihood
ment is expected to have a dramatic effect on
that the governor’s budget will be challenged
government efficiency. On the other hand,
by the legislature. To extend this logic, when
there are states like Mississippi or Rhode
the parties have different programmatic goals,
Island, where there is relatively little ideologi-
it should lead to conflicts over the budget even
cal distance between the parties in office. In
within the legislature (Sinclair 1997) and
these states, where there are few disagreements
increase the...