scholarly journals Leviathan or Public Steward? Evidence on Local Government Taxing Behavior from New York State

2018 ◽  
Vol 49 (4) ◽  
pp. 671-693 ◽  
Author(s):  
Austin M Aldag ◽  
Mildred E Warner ◽  
Yunji Kim
Keyword(s):  
New York ◽  
Local Governments ◽  
Fiscal Federalism ◽  
New York State ◽  
Property Tax ◽  
General Purpose ◽  
Fiscal Stress ◽  
York State ◽  
Expenditure Limitations ◽  
Logistic Regressions

Abstract Fiscal federalism argues local governments compete to provide optimal tax-service bundles as responsible public stewards. In contrast, Leviathan theories argue tax and expenditure limitations (TELs) are necessary to make local governments fiscally responsible. We analyze local taxing behavior in New York State, which implemented a levy limit in 2012 that allows legislative overrides with 60 percent vote of the local governing board. Our 2017 survey of all general-purpose local governments measured fiscal stress, service responses, and local political attitudes and found 38 percent of municipalities voted to override. Logistic regressions show local governments that have more fiscal stress, weaker property tax bases, higher need, and higher employee benefit costs are more likely to override. These findings support fiscal federalism, as local governments that override are pushing back against state policy in order to respond to local needs. TELs introduce unnecessary rigidity and run counter to the precepts of fiscal federalism.

scholarly journals Does Home Rule Overrule the State`s Role? An Analysis of Property Tax Administration in New York State

2006 ◽  
Vol 21 (1) ◽  
pp. 43-67
Author(s):  
Tae Ho Eom
Keyword(s):  
New York ◽  
Local Governments ◽  
New York State ◽  
Property Tax ◽  
The State ◽  
Tax Administration ◽  
Home Rule ◽  
Deep Roots ◽  
Tax System ◽  
York State

This essay analyzes the property tax system in New York State. Based on historical and comparative analyses of three critical factors in property tax administration-assessment standards, revaluation, and assessing units-this study reveals that the current property tax administration structure has deep roots in the "home rule" tradition in New York State, making it hard to achieve intradistrict equity in property tax burden for some assessing units. The study concludes that the state's lack of active role undermines public faith in the property tax system and in local governments. The state should not be overruled by the local government politics based on home rule.

scholarly journals Limits of fiscal federalism: How narratives of local government inefficiency facilitate scalar dumping in New York State

2018 ◽  
Vol 51 (3) ◽  
pp. 636-653 ◽  
Author(s):  
Yunji Kim
Keyword(s):  
New York ◽  
Local Government ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Global Financial Crisis ◽  
Local Level ◽  
New York State ◽  
Fiscal Sustainability ◽  
Governance System ◽  
York State

US local governments are responsible for a variety of services, based on the assumptions of fiscal federalism that local governments can deliver residents the services they want at the lowest cost. However, an austerity narrative that calls for shrinking public budgets emerged after the 2008 global financial crisis and higher levels of government are dumping fiscal stress down to the local level in a process of “scalar dumping.” How do local governments respond to these austerity pressures and why do we see weak pushback from local governments? Focus groups with local government officials across New York State show local responses are constrained by the combination of a state-level limit on local property taxes and a narrative of local government inefficiency. Although local governments have the legal authority to raise revenues, they are reluctant to use this authority due to political pressure from the state and voters. These pressures encourage local governments to maintain services without adequate revenues. Pushback is weak as local governments lack institutional power in a state-based federal system and the heterogeneity among local governments makes collective action difficult. Fiscal federalism promises efficiency and effectiveness in a decentralized governance system, but has limited ability to counter “scalar dumping” that erodes fiscal sustainability. More balance of power in state–local relationships and a narrative that better connects local taxes and services are necessary.

How Does a Reduction in Mandated Medicaid Spending Affect Local Fiscal Behaviors? Evidence from New York State

2021 ◽  
Vol 49 (4) ◽  
pp. 495-547
Author(s):  
Yusun Kim
Keyword(s):  
New York ◽  
Local Governments ◽  
Social Insurance ◽  
New York State ◽  
Property Tax ◽  
Effective Property ◽  
Medicaid Spending ◽  
State And Local ◽  
Sudden Decrease ◽  
The Impact

In 2005, New York (NY) state capped the growth of county-level Medicaid spending, which abruptly decreased counties’ Medicaid outlay in both relative and absolute terms. This study exploits this discontinuity in county Medicaid outlay to estimate the impact of the relief mandate policy on county budgets and property tax levies. It bridges a gap in the public finance literature by addressing local government responses to a sudden decrease in the outlay of a large mandatory spending category. We find a compositional change but no income effect on non-Medicaid spending. However, the policy reduced the effective property tax rate significantly by 6.6 to 8.1 percent on average among affected NY counties after the enactment of the policy relative to control counties. This study advances our understanding of local fiscal responses to an intergovernmental fiscal policy that changes how state and local governments share the costs of a large public social insurance program.

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