Tax Reform: Implications for the State-Local Public Sector

1987 ◽  
Vol 1 (1) ◽  
pp. 87-100 ◽  
Author(s):  
Paul N Courant ◽  
Daniel L Rubinfeld
Keyword(s):  
Public Sector ◽  
Local Governments ◽  
Tax Reform ◽  
Metropolitan Areas ◽  
The State ◽  
Sales Tax ◽  
Revenue Sources ◽  
Tax Exempt ◽  
Aggregate Effect ◽  
State And Local

We analyze the effects of the Tax Reform Act of 1986 on the level and distribution of state and local spending, and on the mix of revenue sources employed by state and local governments. We expect state and local spending to fall by between 0.9 percent and 1.9 percent, with the lower end of the range the more plausible. The conclusion that aggregate spending is unlikely to change very much does not imply that the Tax Reform Act is unimportant to the state and local public sector. The fiscal and economic circumstances of state and local governments vary enormously, and the federal tax reform will therefore affect them very differently. The relative fiscal attractiveness of localities within metropolitan areas will be altered. From both efficiency and equity perspectives, these effects on local governments are likely to be much more important than the aggregate effect on either state or local spending. Over the longer run, apart from the obvious incentive to move away from the nondeductible sales tax to other deductible taxes, the effect of tax reform on the mix of revenue instruments is difficult to predict. The new tax bill also has major implications for bond financing as it it limits the use of the tax-exempt bond instrument.

The problem of the fiscal common-pool: is there an overlap effect on state and local debt?

2020 ◽  
Vol 32 (2) ◽  
pp. 137-157
Author(s):  
Yu Shi ◽  
Rebecca Hendrick
Keyword(s):  
Public Sector ◽  
Local Government ◽  
Local Governments ◽  
Government Debt ◽  
The State ◽  
Content Type ◽  
Common Pool ◽  
Total Debt ◽  
State And Local ◽  
Debt Levels

PurposeThe objective of the study is to determine if an over-borrowing bias emerges when the state fiscal base is shared by multiple general-purpose and special-purpose jurisdictions serving different groups of citizens.Design/methodology/approachThis study uses panel data from all 50 states in the US from 1997 to 2007 to estimate models of total debt levels of state governments and total debt levels of all local governments aggregated at the state level. For comparison, it also estimates total debt levels of state and local governments taken together for the same years.FindingsThis study finds that jurisdictional overlap will increase state government debt, local government debt, as well as combined state and local government debt.Originality/valueThe finding from the study suggests that the fiscal common-pool model provides a more accurate analysis and more appropriate understanding of the institutional composition at the state and local public sector, especially for the vertical dimension of the local public sector where there are more specialized and overlapping jurisdictions.

Do State Sales Taxes Crowd Out Local Option Sales Taxes?

2018 ◽  
Vol 18 (3) ◽  
Author(s):  
Gregory S. Burge ◽  
Cynthia L. Rogers
Keyword(s):  
Local Governments ◽  
Sales Tax ◽  
Tax Rates ◽  
Tax Base ◽  
Tax Rate ◽  
Sales Taxes ◽  
Fiscal Externalities ◽  
Crowd Out ◽  
State And Local ◽  
Fiscal Spillovers

Abstract Currently, sales taxes are imposed at both the state and local levels in 37 US states. In these environments, vertical tax competition occurs as governments share a common sales tax base, and local jurisdictions have autonomy over sales tax rates. As cash-strapped states look to sales taxes for additional revenues, local governments may worry about potentially adverse revenue impacts, as consumers react to combined tax rate increases. This study examines state-municipal and county-municipal fiscal spillovers using an empirical approach that accounts for endogenous tax policy leadership and voter tax fatigue. Employing comprehensive longitudinal data from Oklahoma, we find that state tax hikes significantly crowd out future rate increases for the large group of jurisdictions that are designated as followers. Leader jurisdictions are not found to display crowd-out tendencies, a result that is consistent with recent work suggesting that leaders may be less influenced by vertical fiscal externalities than other jurisdictions.

The Constitutionality of Uncompensated §179D(d)(4) Allocations by State, Local, and Municipal Government Building Owners

2018 ◽  
Vol 16 (1) ◽  
pp. 1-16
Author(s):  
Edward B. Douthett ◽  
Jonathan E. Duchac ◽  
Arthur Petzel
Keyword(s):  
Energy Efficient ◽  
Local Governments ◽  
Municipal Government ◽  
Policy Changes ◽  
State Constitutions ◽  
Cost Of Energy ◽  
Tax Exempt ◽  
Tax Deductions ◽  
State And Local ◽  
Reasonable Argument

ABSTRACT Internal Revenue Code §179D provides accelerated tax deductions to building owners that invest in energy efficient building improvements. However, the value of this incentive for government building owners is limited as these entities are tax exempt. §179D(d)(4) allows state and local governments to realize a portion of these benefits by transferring their §179D deductions to a qualified, taxable, private sector entity in exchange for compensation. This compensation can be used to reduce the governmental entity's cost of energy efficient investments, allowing them and, ultimately, taxpayers to benefit from this incentive. In practice, disagreement exists over a governmental entity's right to compensation in exchange for §179D(d)(4) transfers. These differences have become more visible in recent years, resulting in policy changes by state and local governments, and litigation by state agencies that had not been compensated for these transfers. We contribute to this debate by reviewing and evaluating (1) the arguments against providing compensation in exchange for §179D(d)(4) transfers, (2) the state constitutionality of uncompensated §179D(d)(4) transfers, and (3) recent litigation and policy changes. Our analysis finds little support for arguments against compensated transfers, and a reasonable argument that compensated transfers may be required under most state constitutions.

Inter-Governmental Relations in the Provision of Local E-Services

2011 ◽  
pp. 1120-1124
Author(s):  
R. Kelso
Keyword(s):  
Federal Government ◽  
Local Governments ◽  
Economies Of Scale ◽  
New Technologies ◽  
The State ◽  
Federal State ◽  
State Governments ◽  
Political Commentary ◽  
Commonwealth Government ◽  
State And Local

Australia is a nation of 20 million citizens occupying approximately the same land mass as the continental U.S. More than 80% of the population lives in the state capitals where the majority of state and federal government offices and employees are based. The heavily populated areas on the Eastern seaboard, including all of the six state capitals have advanced ICT capability and infrastructure and Australians readily adopt new technologies. However, there is recognition of a digital divide which corresponds with the “great dividing” mountain range separating the sparsely populated arid interior from the populated coastal regions (Trebeck, 2000). A common theme in political commentary is that Australians are “over-governed” with three levels of government, federal, state, and local. Many of the citizens living in isolated regions would say “over-governed” and “underserviced.” Most of the state and local governments, “… have experienced difficulties in managing the relative dis-economies of scale associated with their small and often scattered populations.” Rural and isolated regions are the first to suffer cutbacks in government services in periods of economic stringency. (O’Faircheallaigh, Wanna, & Weller, 1999, p. 98). Australia has, in addition to the Commonwealth government in Canberra, two territory governments, six state governments, and about 700 local governments. All three levels of government, federal, state, and local, have employed ICTs to address the “tyranny of distance” (Blainey, 1967), a term modified and used for nearly 40 years to describe the isolation and disadvantage experienced by residents in remote and regional Australia. While the three levels of Australian governments have been working co-operatively since federation in 1901 with the federal government progressively increasing its power over that time, their agencies and departments generally maintain high levels of separation; the Queensland Government Agent Program is the exception.

Directed Improvisation in Administrative Financing

2018 ◽  
Author(s):  
Yuen Yuen Ang
Keyword(s):  
Public Service ◽  
Local Governments ◽  
Tax Reform ◽  
Service Providers ◽  
The State ◽  
Popular Opinion

This chapter examines one of the oldest and most basic problems of governance: how to pay the bureaucracy. Following the 1994 tax reform, China’s local governments, even the relatively prosperous county of Zouping, face heightened budgetary pressures. Agencies and public service providers are therefore compelled to “self-finance”—that is, generate a portion of their own income and staff benefits. Contrary to popular opinion, practices of administrative self-financing are not arbitrary and lawless; rather, they are bound by rules, specifically, rules made by an intersecting matrix of vertical and horizontal authorities within the state. More broadly, this account illustrates a key condition of adaptation—which this chapter calls “directed improvisation.”

Pastoralism, Ethnicity, and Subnational Conflict Resolution in the Middle Belt

2018 ◽  
pp. 678-696
Author(s):  
Laura Thaut Vinson
Keyword(s):  
Conflict Resolution ◽  
Local Government ◽  
Federal Government ◽  
Local Governments ◽  
The State ◽  
The Past ◽  
Material Costs ◽  
State And Local Government ◽  
State And Local ◽  
Subnational Conflict

This chapter explores the problem of rising pastoralist–farmer and ethnic (religious and tribal) violence in the pluralistic Middle Belt region of Nigeria over the past thirty to forty years. In particular, it highlights the underlying issues and conflicts associated with these different categories of communal intergroup violence, the human and material costs of such conflict, and the broader implications for the Nigerian state. The federal government, states, local governments. and communities have not been passive in addressing the considerable challenges associated with preventing and resolving such conflicts. It is clear, however, that they face significant hurdles in resolving the underlying grievances and drivers of conflict, and their efforts have not always furthered the cause of conflict resolution and peacebuilding. Greater attention to patterns of inclusion and exclusion and to the allocation of rights and resources will be necessary, particularly at the state and local government levels, to create a more stable and peaceful Middle Belt.

FUNDAMENTAL TAX REFORM AND STATE AND LOCAL GOVERNMENTS

1996 ◽  
Vol 49 (3) ◽  
pp. 475-486
Author(s):  
DOUGLAS HOLTZ-EAKIN
Keyword(s):  
Local Governments ◽  
Tax Reform ◽  
State And Local

Central place theory and tax revenue from tourism

2020 ◽  
Author(s):  
Robert J. Gmeiner
Keyword(s):  
Metropolitan Areas ◽  
Central Place ◽  
Sales Tax ◽  
Tax Revenue ◽  
Policy Recommendations ◽  
Central Place Theory ◽  
Place Theory ◽  
Tourist Destinations ◽  
Tourism Destinations ◽  
State And Local

Many governments, both state and local, attempt to promote tourism as a way of raising revenue and encouraging economic development. This is especially prevalent in Florida, where tourism revenue constitutes a major source of revenue through the sales tax. However, some areas in Florida are considerably more popular as tourist destinations than others. In this article, I use central place theory to provide a theoretical framework for dividing metropolitan areas into categories with similar characteristics and similar levels of tourism in order to provide policy recommendations specific to each category. I conclude that a uniform approach to tourism promotion will have far less meaningful overall effects compared to policies targeted based on this division of tourism destinations.

Federal Tax Reform and the Financing of State and Local Governments

1986 ◽  
Vol 5 (4) ◽  
pp. 683 ◽  
Author(s):  
Howard Chernick ◽  
Andrew Reschovsky
Keyword(s):  
Local Governments ◽  
Tax Reform ◽  
State And Local
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