The Great Recession & Fiscal Allocation for Public Health:

How Has Our Slice of The Pie Changed?

AuthorsJ. Mac McCullough, PhD, MPHAssistant ProfessorSchool for the Science of Health Care DeliveryArizona State University

JP Leider, PhDConsultant, JP Leider Consulting LLC

Gulzar Shah, PhD, MStat, MSAssociate Dean for Research & Associate ProfessorJiann-Ping Hsu College of Public HealthGeorgia Southern University

Introduction & Motivation•Local sources of revenues are important for LHD financial stability and may reflect local prioritization of public health relative to other programs

•Focus of most of the post recession studies have been to examine the changes in budgets regardless of sources of revenue

• A local health department’s local revenues are often evaluated relative to non-local revenues (e.g., % of revenues from local sources)

•A more informative comparison is an area’s local revenues for public health relative to other non-public health revenues• “Fiscal allocation” for public health

Total LHD Revenues

Revenues from local sources

Total Local Public Revenues12

3

Research QuestionWhat is the local fiscal allocation for public health as of 2008?

What organizational or jurisdictional factors are associated with higher fiscal allocation?

How has fiscal allocation for public health changed since before the Great Recession? What organizational or jurisdictional factors are associated with higher levels of fiscal allocation

retention? Especially important at the extremes (what separates the big gains from the big declines?)

Methods•Data sources:

• Local governmental revenue data from U.S. Census of Local Governments (2007 & 2012)• Contains geographic and financial data on 87,000 local governments (cities, counties, school districts, special districts, etc.)

• LHD data from NACCHO Profile survey (2008 & 2013)

•Matched using FIPS codes, excluded LHDs with missing/unreliable expenditure data• # LHDs in sample in both years: n = 983 LHDs

•Outcome of interest:• Fiscal Allocation = (Total LHD Local Revenue) ÷ (Total Local taxes for corresponding local governments)

• Local revenue expenditure data self-reported to NACCHO by LHDs• Local taxes include: property taxes, other collected taxes, fees, fines

• 2007, 2012, and change between 07-12

•Univariate, bivariate, multivariate analyses• Also compute models stratified by level of long-term debt

Results•Fiscal allocation varies widely across LHDs

• Large number of LHDs receive no fiscal allocation• Small number of LHDs receive high fiscal

allocation

•Substantial state-level variation

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20+0%

5%

10%

15%

20%

25%

Fiscal Allocation(% of total local taxes for local public health)

Correlates of Fiscal Allocation in 2007 LHD or Area Characteristic Association with Fiscal AllocationSingle-county LHD jurisdiction (versus all other jurisdiction types) Single county jurisdiction 0.80 percentage point higher Fiscal AllocationLHD has a Local Board of Health (versus no LBOH) LBOH 1.84 percentage point higher Fiscal AllocationLHD per capita revenues (standardized) ~$40 increase of per cap revenues 2.38 percentage point higher Fiscal Allocation# of Services Provided by LHD 1 additional service provided 0.09 percentage point higher Fiscal Allocation

Variables not significant in model: Setting (urban, suburban, rural), % of population that is Non-White, LHD authority to set and impose fees for public health, LHD authority to impose taxes for public health, LHD authority to request tax levy for public health, number of services provided by state, number of services provided by other local government, number of services not available in area

Estimates correspond to the predicted percentage point change in fiscal allocation for presence or one-unit increase for each factor

Changes in Fiscal Allocation0

1020

3040

Per

cent

-10 -5 0 5 10Percentage Point Change in Fiscal Allocation (2007-2012)

•Lots of small changes before versus after the Great Recession

•Small negative changes more frequent than small positive changes, but…

•There were LHDs that managed to increase their fiscal allocation from 2007 to 2012!• Were these LHDs just “lucky” or are there

patterns lurking in the data?

Correlates of Changes in Fiscal Allocation

•Factors associated with increased likelihood of having a “large” decline in FA from 2007-12:• Higher percent population served that is non-white (OR = 1.02*)• Greater number of public health activities provided by the state health department (OR = 1.05**)• Higher baseline fiscal allocation (OR = 1.09**)

•Factors associated with lower likelihood of having a “large” decline in FA from 2007-12:• Greater number of public health activities provided by the local health department (OR = 0.97**)

•Other factors included in the model (not significantly associated)• Urban/Suburban/Rural; Population served; Single-county jurisdiction; Presence of LBOH; Per capita

expenditures; Jurisdictional authority to levy taxes for public health; Number of public health activities provided by other entities; Number of public health activities not available in jurisdiction.

Correlates of Changes in Fiscal Allocation

•Previous slide discussed likelihood of “large” changes (> |25%|). What about smaller changes?

•In addition to previous (% jurisdiction that is non-white, # PH activities provided by LHD and by state):Compared to rural LHDs, urban LHDs had larger declines

•BUT, area’s Long-Term Debt serves as moderator to many of these relationships!• Association between percent non-white and decline in FA only holds in areas with high debt• Associations between state and local service provision and changes in FA only hold in areas with low

debt• In addition, suburban LHDs and jurisdictions with the ability to set and impose fees for public health saw

gains in FA compared to their counterparts.

Implications & Next Steps

Fiscal Allocation for LHDs•Fiscal allocation for public health averages approximately 3.3% of all local governmental “own revenues”• High variation within and between states

•The Great Recession not only resulted in a smaller overall pie, but public health now receives a smaller piece of that pie.

Takeaways for Practitioners & Implications for Health Equity

•A range of factors are associated with levels of fiscal allocation for public health• LHD jurisdiction type, governance, expenditures, service provision• Some are amenable to LHD leadership intervention (e.g., service provision), others are harder to impact

•From health equity and disparities perspective:• Findings that areas with high proportion of non-white population and high levels of long-term debt

were prone to declines in FA during the Great Recession may be concerning.• Suburban LHDs, those able to set their own fees, and those providing higher number of direct services

tended to fare better.

Impacts of Long-Term Debt on LHDs

•Anecdotally, we generally understand that very high levels of long-term debt is bad• Less room for other priorities• Less flexibility to match current needs

•Public health is not immune An area’s long-term debt level is extremely important• Areas with high long-term debt tend to have lower fiscal allocation for public health• Only know which levers are relevant/effective after considering long-term debt

•Take Away• Researchers: also consider additional financial measures beyond per capita revenue• Policy Makers: what local tax and debt conditions are most conducive to advocacy for increased

funding? What areas may be especially prone to erosion of local funding during future economic recessions?

Thank YouQuestions?

mccullough@asu.edu