Local Fiscal Conditions Research Articles

Health disparity among older adults in urban China: The role of local fiscal conditions

This study explores the disparities in older adults' self-rated health within the urban landscape of China. Drawing on the 1% national population survey of China in 2015, it highlights how variations in city development contribute to geographical health disparities among older residents. In the era of the decentralized fiscal system, a crucial mechanism identified is the role of cities’ local fiscal revenue in connecting their socioeconomic development and the health status among older adults. Despite efforts by cities in lower socioeconomic positions to increase fiscal expenditure and address deficits through central transfer payments, they prove inadequate in effectively mitigating population health disparities. The prioritization of economic growth and neglect of public service provision responsibilities are fundamental causes within this fiscal framework. The findings underscore the urgent need for increased central transfer payments in public services to address the growing disparities in older adults' health.

Assessing fiscal distress in small county governments

Assessing fiscal distress in small county governments

Fiscal Decentralization in Comparative Perspective: Analysis of the Intergovernmental Grant Systems in Indonesia and Thailand

Decentralization can inadvertently lead to local fiscal disparity. One type of intergovernmental fiscal transfers, the general-purpose grant, can help equalize local fiscal imbalances. This article examines the extent to which the general-purpose grant systems in Indonesia and Thailand help mitigate local fiscal disparity. The findings show that the general-purpose grant system in Thailand does not effectively address disparities in local fiscal conditions. Localities with more own-source revenues and higher per capita income receive more general-purpose grants than those with weak fiscal capacity. In contrast, Indonesia’s general-purpose grant allocation system provides more resources for economically disadvantaged and conflict-ridden provinces.

How Do the Location, Size and Budget of Open Space Conservation Affect Land Values?

In this article we present a model to examine the optimal location, size, and budget of open space conservation and the resulting impact on land values and local fiscal conditions in an urban area. Results indicate that open space conservation can transform the defining features of an urban landscape. A well-designed open space conservation program can improve municipal services, increase total property values, and attract households to the city without substantially increasing tax burdens, while an improperly designed open space program can have the opposite effects. Results also reveal the key parameters that determine the optimal location and size of open space conservation and their fiscal and land value effects.

Capitalization of Property Taxes in Norway

Capitalization of the property tax is of particular interest in Norway since many local governments decide not to have a property tax. We apply a rich data set of housing transactions and characteristics for three years (1997–1999) and combine them with local government-level data about property taxation, local services, and community characteristics. The analysis of capitalization faces serious methodological challenges of endogeneity and background factors affecting housing prices and local fiscal decisions. We investigate the relationship between property tax and housing prices using a variety of econometric specifications and using instruments for property taxation. The results indicate that housing prices respond to property taxation and with full capitalization at realistic discount rates. High child care coverage also contributes to high housing prices. The existence of capitalization effects suggests that housing markets reflect local fiscal conditions and that residential mobility is of importance to understand local government resource use.

Property tax limitations and local fiscal conditions: The impact of Proposition 2½ in Massachusetts

In Massachusetts, Proposition 2½ limits local property taxes to 2.5% of assessed value (the “levy ceiling”) and restricts the current limit on property tax revenue (the “levy limit”) to an annual growth rate of 2.5%. Town residents can vote to override the 2.5% increase in the levy limit, but not if it exceeds the 2.5% levy ceiling. An override results in a permanent increase in the city or town's levy limit. We look at the role that Proposition 2½ has played in the fiscal conditions of towns in Massachusetts. To do so, we develop a model of Proposition 2½ override activity and local fiscal condition. We estimate the model using panel data on Proposition 2½ override attempts since the mid-1980's as well as other town-level socioeconomic and fiscal information. Using a fixed effects estimator, we find that passing a reasonably sized override can significantly strengthen local fiscal condition, both in the short-run and long-run. Further, previous override attempts increase the likelihood of current override activity. The recent economic downturn has resulted in difficult times for local governments. Cuts in state aid have a disproportionate impact on poorer towns. These towns have been less able to attempt and to pass overrides and hence they have not been able to reap the benefits that this has for their fiscal condition. They are faced with reducing expenditures (e.g. teacher layoffs) or passing overrides to increase revenues. We find that worsening fiscal conditions lead to more overrides so we expect to see more override activity in the near future.

Municipalities and the Institutionalization of Market-Based Governance: Nested Holons within the Institutional Environment of the State

Local governments walk a fine line between the traditional values of financial stewardship and accountability and those related to entrepreneurialism and profitability. Recent decades have seen an increase in the adoption of contracting-out, the implementation of service fees, the development of public authorities, and other non-traditional revenue strategies that are often referred to as market-based governance policies. Although these non-traditional practices have not been widely discussed in relation to one another, they are all underscored by a spirit of business-like efficiency, responsiveness, and cost-saving that has traditionally been associated with the private sector. This research empirically assesses the adoption of market based governance policies and hypothesizes that policymakers are more likely to adopt these policies than the politically charged alternative of tax increases. The adoption decision is mediated by the institutional environment of both state and local fiscal conditions, stakeholder influences and administrative capacities. A multilevel ordered logit is used to determine which factors influence the adoption of the several policy options.

Measuring Municipal Fiscal Condition: The Application of U.S.-Based Measures to the Context of Thailand

This research attempts to apply U.S.-based measures in order to examine municipal fiscal conditions in Thailand. Fourteen municipal governments located in the central and eastern regions of the country are explored, utilizing data from FY 2001 to 2006. The findings show that the selected measures of revenue-raising capacity and expenditure provide a sensible picture of Thai municipal fiscal conditions when compared to U.S. cities during past decades. Large, highly populous central cities as well as semi-rural, residential areas are fiscally weak. By contrast, suburban and industry-based cities are fiscally healthy. This study provides a foundation for the design of intergovernmental transfer systems that takes into account the local fiscal conditions and helps to extend the external validity of existing analytical tools.

Red Ink in the Rearview Mirror: Local Fiscal Conditions and the Issuance of Traffic Tickets

Municipalities have revenue motives for enforcing traffic laws in addition to public‐safety motives because many traffic offenses are punished via fines and the issuing municipality often retains the revenue. Anecdotal evidence supports this revenue motive. We empirically test the revenue motive using a panel of annual data for North Carolina counties from 1990 to 2003. We find that significantly more tickets are issued in the year following a decline in revenue but that the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a 10 percent decrease in negative revenue growth results in a 6.4 percent increase in the growth rate of traffic tickets. Our results suggest that tickets are used as a revenue‐generation tool rather than solely a means to increase public safety.

Tarifliche Steuerbelastung von Einzelunternehmen in Dänemark, Deutschland, Österreich und Tschechien

Abstract Sole proprietorships are of great significance for investment and employment in the national economies of many EU states. Although sole proprietorships are also exposed to international competition, their local fiscal conditions have not yet been adequately investigated. The article seeks to close this gap. The focus is on a comparative examination of the tax burden in three states which border on Germany: Denmark, Austria and the Czech Republic. First the tax burden according to the average nominal tax rate alone is examined. In the second scenario the influence of tax benefits for retained profits are taken into account. Scenario number three analyses the effect of the various rules for setting off losses between different fiscal periods. The study shows that, all things considered, Germany is the fiscally most favourable location for about 80 % of German sole proprietorships.

Red Ink in the Rearview Mirror: Local Fiscal Conditions and the Issuance of Traffic Tickets

Municipalities have revenue motives for enforcing traffic laws in addition to public safety motives because many traffic offenses are punished via fines and the issuing municipality often retains the revenue. Anecdotal evidence supports this revenue motive. We empirically test this revenue motive using panel data on North Carolina counties. We find that significantly more tickets are issued in the year following a decline in revenue, but the issuance of traffic tickets does not decline in years following revenue increases. Our results suggest that tickets are used as a revenue generation tool rather than solely a means to increase public safety.

Estimating Differential Responses to Local Fiscal Conditions: A Mixture Model Analysis

Alternative hypotheses exist regarding the impact of local sales and income taxes on local governments’ taxing and spending decisions. One hypothesis is that local governments use sales and income taxes to pay for spending increases and leave property tax collections unchanged, while an equally plausible alternative is that local governments use sales and income taxes to reduce property taxes. Traditional models that restrict the impact of these local taxes to be the same across all local governments are not able to capture both types of behavior. The methodological difficulty lies in allowing for differences in behavior with no a priori information on which cities belong in which category. In this article, the authors use panel data to estimate a mixture model of spending and property tax response to the existence of local taxes. These empirical results provide evidence to support both hypotheses. These differences are both substantive and statistically significant.

Virginia's Excellent Adventure

THE VIRGINIA General Assembly is concerned that there remains a significant gap between the best- and poorest-performing Even as it acknowledged that most elementary and secondary are meeting academic achievement goals, the Assembly proceeded to request that information be collected on best practices used in high-performing and school divisions (districts) in the state. The resulting report, Review of Factors and Practices Associated with School Performance in Virginia, presents important findings. The Joint Legislative Audit and Review Commission -- established by the legislature as a free-standing agency to make independent and objective performance reviews of state programs and agencies -- conducted the study that the legislators requested. The study had two major research components: a quantitative analysis of the measurable factors associated with Standards of Learning (SOL) test results in and divisions and a qualitative review of and divisions. Project leader Hal Greer noted that researchers analyzed SOL test scores and the variables associated with them and visited 61 public in 35 school divisions, including high-scoring schools, low- scoring schools, schools that were exceeding predicted test scores, and schools with a large increase in test scores. Researchers held structured interviews with 11 superintendents and 61 principals. In addition, they conducted interviews with the state superintendent and with department of education officials, surveyed core-subject teachers in 56 of the 61 schools, and conducted literature and other document reviews. Six major findings resulted from the review: * Over the course of several years of SOL implementation, SOL test scores and pass rates have increased substantially. * However, a large percentage of the difference in the SOL test performance of and school divisions is still explained by the demographic characteristics of students and their communities. Further analysis revealed that the relationships between these factors and test scores could be partially explained by differences in teacher qualifications and experience, family support and structure, school and division characteristics, and local fiscal conditions. * Some of the challenged by these demographic factors have used best practices that have helped them to achieve success on the SOL tests, and these practices are identified in the report. * Support provided at the division level has a direct bearing on the success of individual schools, and successful divisions generally provide more support to their schools. Effective division practices are identified in this report. * In the divisions and visited for this review, superintendents, principals, and teachers generally indicate a belief that the SOLs have been helpful in improving the performance of their and students. * However, the Commonwealth and its public still face a number of challenges for the future, including addressing the needs of pupils served by where performance is not considered acceptable, responding to issues such as high dropout and retention rates, and meeting the expectations of the federal No Child Left Behind Act. Specific Findings A number of the study's findings concerned relationships between poverty, race, adult educational attainment, and test scores. For example, teacher salaries are lower in divisions serving communities with a low proportion of college-educated adults. Teacher salaries in these areas are, on average, 13% lower than those in communities where a large proportion of adults are college educated. Per-pupil expenditures for instruction are also lower in communities with low adult educational attainment. Overall, the study identified nine practices used in with good SOL test results. …

Central city fiscal conditions and MSA population distribution

This article empirically examines the relationship between local fiscal conditions and the distribution of population within a metropolitan area. Specifically, it is concerned with how central city policies may affect shifts of population to the suburbs. This has strong policy implications especially for cities undertaking economic redevelopment programs, which may have spillover benefits or costs to their surrounding suburbs. This analysis utilizes a panel of county level Census of Population and Census of Governments data spanning 1960-90 to examine these issues. The results show that central city fiscal conditions are expected to affect the relative size of an MSA's city and suburban population.

The Emergence of Policy Entrepreneurs in Local Communities

This study applies the concept of entrepreneurship to the realm of local public policy. Two categories of policy entrepreneurs are identified: the pro-growth type and the anti-growth type. The main analytical focus centers on the effects of local conditions on the emergence of each type of entrepreneurs. Results of probit analyses indicate that local demographic and fiscal conditions can not successfully explain the appearance of entrepreneurs. Local political conditions, however, may exert significant effects on the probability of finding an entrepreneur. That is, an antigrowth entrepreneur seems to emerge from a political context in which collective action problems are minimized and in which the profits of entrepreneurship are secured easily. For a more appropriate theory of policy entrepreneurs, we need to incorporate the relatively unexplored fields of political conditions into the model-building process.

The Structure of Local Public Finance and the Quality of Life

Differences in local fiscal conditions generate compensating differentials across local land and labor markets just as we have long known amenities to do. Thus the fiscal climate affects the quality of life across metropolitan areas. We present new results showing that intercity fiscal differentials are nearly as important as amenity differentials in determining the quality of life across urban areas. The paper also investigates the sensitivity of the quality-of-life rankings with respect to assumptions about the nature of the marginal entrant. We estimate a random effects model to account for city-specific error components in the housing and wage regressions. Those results indicate that the standard errors of previous OLS-based quality-of-life rankings have been biased downward substantially. More encompassing data on city traits as well as superior controls for worker and housing quality are needed to increase the precision of quality-of-life estimates.

The Importance of Local Fiscal Conditions in Analyzing Local Labor Markets

A new test of the compensating wage differential model is proposed. The logic behind Roback's model showing how differences in nonproduced amenities may be reflected in intercity wage differentials is extended to the case of differences in local fiscal conditions, represented by tax rates and publicly produced services. Results show that differences in local tax rates and services provisions do generate compensating wage differentials across cities. The effects of a particularly large set of taxes and effective services output measures are examined.