By August Caravalho, on July 12, 2011

I too have been mulling over capstone ideas. For any of you, dear readers, who may be unfamiliar with the term, our capstone is essentially a thesis, the final requirement before the School of Government confers an MPA. It is different from a thesis though, mainly in that a capstone can only be five pages long. In this way it is a thesis concentrate, all the work of a longer paper but boiled down and concise.

Like Molly discussed last week, now is the time to begin to make first steps in the process of creating this final paper. I have a fairly good idea of what I will be researching and writing.

This summer, for my internship here in Charlotte, I researched the revenue structures of council-manager cities across the country. I only considered fiscal year 2010, so I would be able to take a snapshot of the sources of revenue that were funding local government operations during that period. While researching this project, I began wondering if the data I was gathering was representative of the typical experience of those cities. I became interested in understanding trends, rather than just single data points. But that was beyond the scope of the project I was working on and I had limited time and other work to get to before the end of July.

So I pushed that inclination to the side and moved on to other things, the ride-alongs I described in this correspondence, meetings and lunches, and the other projects I have been completing this summer. I did this back of the mind simmering until David Ammons visited me last week, checking in on my internship experience as a member of UNC faculty. In preparation for our meeting, I did some more focused thinking on what I wanted to write about. When I took stock of my summer, there really were no other options that struck me.

Local governments derive their revenue from a few primary sources: property taxes, sales taxes, intergovernmental revenue, fines and forfeitures, and hotel taxes. There are a slew of other minor revenue sources, but those are the main tent poles. The thing is though, these funding sources support cities in dramatically different proportions depending on the city. I knew this from my work thus far. What I plan on getting into is developing a revenue profile for each of the cities I have studied over the past six years, from 2006 to 2011. I will look into where these cities are getting their money and how those streams have performed over time. What is especially interesting is that this period of time includes the Great Recession we have all encountered over the last few years. I will be able to see what revenue sources stood up to this chaos, and which sources wilted. (My prediction is that local property taxes will be more robust than, say, intergovernmental revenue. But we’ll see.)

With these revenue profiles, I will be able to compare each city’s experience during that time of financial stress. Then I will try to develop two things: 1) a metric of “success” in weathering the recession and 2) a series of variables that are under the control of management that may predict success. In the first case, I plan on developing some kind of success index, including things like layoffs, deficit spending, and percentage of fund balance. In the second case, I will be looking for things such as the existence of long range financial planning or excessive debt. This is the part where my proposal gets a little fuzzy. But hey, it’s still July.

So there it is. That’s more or less my plan for the paper that will finally get me my Master’s degree. If it’s too wonkish, that was the point. If it wasn’t wonkish enough, I’ll get better.