Are Municipal Budget Cycles Political? Evidence From Ontario, Canada

Abstract

In this paper, we examine whether a political budget cycle exists in municipal governments that fall under tight financial and institutional regulation by senior orders of government. For other levels of government, there is evidence that politicians initiate popular programs in election years and delay the unpopular tax increases after the election. Using a sample of 444 Ontario municipalities, with few exceptions, no such evidence was found. The results are the same regardless of the length of the term (three or four year), municipal size (small, medium, or large), and the governance system (one or two-tier). The paper concludes with possible explanations as to why there are no opportunistic manipulations of municipal budgets.