Spillovers of state policy innovations: New York's hazardous waste regulatory initiatives

States are often seen as policy laboratories where innovations are tried that may later be adopted by other states or the federal government. Engendering such experiments may, however, promote spillovers on other states. We analyze several of New York State's policy initiatives from the 1980s that were intended to influence the selection of waste management technologies by hazardous waste generators. Time series analysis of hazardous waste manifest data reveals that constraints on land disposal of certain wastes and a tax on hazardous waste generation and disposal were associated with shifts to lower-risk technologies for waste management. The policies also constrained imports to in-state land disposal facilities and may have led to increased exports for incineration and recycling, thus shifting some of the risks of hazardous waste to other jurisdictions with less stringent regulations or lower taxes on waste generation and management.     

How costly is “clean”? An analysis of the benefits and costs of Superfund site remediations

The cleanup of hazardous waste sites under the U.S. Environmental Protection Agency's Superfund program is governed by a number of legislative and regulatory constraints. Congress passed legislation in 1986 directing the Environmental Protection Agency (EPA) to pursue permanent remedies that embodied stringent cleanup standards. The agency has chosen to use conservative assumptions in risk assessments at hazardous waste sites, including a presumption that on‐site risks for hypothetical future residents should be calculated in the site remediation process. This article offers the first comprehensive assessment of the cost‐effectiveness of these Superfund cleanups. Our results reveal that many EPA Superfund remediations fail a partial benefit‐cost test. For a sample of the 150 Superfund sites, we find that at the majority of sites the expected number of cancers averted by remediation is less than 0.1 cases per site and that the cost per cancer case averted is over $100 million. The analysis demonstrates the importance of explicitly calculating the trade‐offs embodied in environmental cleanup decisions. © 1998 by the Association for Public Policy Analysis and Management     

Environmental policy and the reduction of hazardous waste

Environmental policy encouraging hazardous waste reduction began in 1976 with an Environmental Protection Agency statement promoting source reduction as the preferred method of hazardous waste management. In 1984, Congress included a policy statement supporting waste reduction in the Hazardous and Solid Waste Amendments (HSWA). However, the cornerstone of HSWA was the land disposal restrictions (LDRs)—a command and control policy prohibiting land disposal of untreated hazardous waste. Consideration of the hazardous waste generation decision in the aggregate would suggest that the price effect resulting from the LDR program and increased hazardous waste management prices in general would lead to source reduction. Although at the firm level there may be interdicting factors, statistical analysis of generation data for Tennessee support this hypothesis. Both the institution of the LDRs and waste management prices have significant negative effects on the level of generation. The analysis, however, reveals the existence of large industry and firm effects, indicating that the response to public policy may exhibit significant variance, especially at the individual generator level.     

Equity under and state responses to the Superfund Amendments and Reauthorization Act of 1986

A difficult problem facing states with significant commercial hazardous waste treatment and disposal capacity is the inflow of waste into the state for disposal. The states with commercial capacity allege that other states are reluctant to aggressively pursue siting facilities, and in fact may be impeding development through restrictive siting provisions. Likewise, capacity states are frustrated with the Environmental Protection Agency for its perceived inaction in reviewing state siting standards. Equity discussion abounds at the state level. Capacity states hoped that equity would be elevated to federal debate through Section 104(k) of the Superfund Amendments and Reauthorization Act of 1986. I examine equity and review hazardous waste management in a federalism context to discern the relationship between EPA and the states. I focus on the different roles EPA and the states perceived for the other during implementation of Section 104(k). I conclude with an evaluation of how equity was handled under the new legislation and what remains to be done.Research for this article was supported by the Tennessee Department of Health and Environment and the Waste Management Research and Education Institute at the University of Tennessee. I appreciate the comments provided by David L. Feldman and the anonymous Reviewers. The research assistance of Susan Bohm Seylar is gratefully acknowledged.     

Citizen groups and scientific decisionmaking: Does public participation influence environmental outcomes?

This paper explores the influence of local community groups on agency decisionmaking at hazardous waste sites nationwide. The central purpose of this research is to examine the relative influence of two forms of public participation at Superfund sites: Community Advisory Groups (CAGs) and Technical Assistance Grants (TAGs). When citizens mobilize and become involved in the decisionmaking process via CAGs and TAGs, are outcomes systematically different when compared to hazardous waste sites where citizen groups are not active? I utilize a treatment effects regression analysis to isolate the impact of these groups on remedy selection at Superfund sites while adjusting for the non‐random formation of local interest groups. The results suggest that even when controlling for other factors that may guide agency decisionmaking, such as site characteristics, the Environmental Protection Agency is more likely to choose health protective clean‐up approaches when CAGs and TAGs have formed at Superfund sites. © 2007 by the Association for Public Policy Analysis and Management     

THE EXTENT OF SOCIAL REGULATION: HAZARDOUS WASTE CLEANUP AND THE REAGAN IDEOLOGY

Social regulation resolves the conflict over who will bear the costs of production-related harm to public health, safety, and the environment. The extent of social regulation reflects the political power of affected interests, the economic consequences of control, and the prevailing regulatory ideol- ogy. In this paper, I analyze the impact of the Reagan deregulatory ideology on implementation of the Superfund program to cleanup hazardous waste sites. Itesolution of the conflict over enabling legislation is examined to gauge the relative political power of Superfund Act supporters. Resolution of the ronflict over implementation is examined to determine the extent to which these same political forces limited the success of the Reagan ideology in promoting regulatory inaction.     

A tragedy of the anticommons: local option taxation and cell phone tax bills

When multiple taxing jurisdictions overlap and fail to account for one another’s actions, they over-tax the common base. This is a prediction of the anticommons model, in which numerous parties have authority to exclude others from using a resource. This model further predicts that when governments over-tax the base, private parties will underutilize the resource, and underutilization will be greater as the number of parties with exclusion rights rises. We test these predictions by studying cell phone taxation and local option tax authority, which allows some cities, counties, and special-purpose districts to levy taxes on cell phone use. Consistent with theory, we find that the tax rate on cell phone service is higher when local governments have the option to tax. Further, the percentage of households owning cell phones is lower when there is the local option to tax, and ownership rates fall with the number of taxes levied.     

The convergence of fiscal regimes and the decline of the Tiebout effect

A measure of waste from the competitive rent-seeking activity of special interest groups in federal, state and local budgets was calculated over the period 1900–88. This period in U.S. fiscal history is characterized by constitutional changes that have made for more transparency in governmental fiscal activities and for greater diffusion of taxes. The XVI Amendment to the Constitution created the progressive individual income tax (the corporate income tax was judged to be an excise tax in 1909 and passed the test of constitutionality). High marginal tax rates are a justification for a high average level of taxation. The Full Employment Act of 1946 insitutionalized government deficits as a means of meeting a political objective. As a result, opportunities for rent-seeking through budgetary reallocations rose in the United States. In the first two decades of the 20th century, waste at all levels of government represented about 10 percent of incremental national output. Today, waste is three times that amount.The transparency and diffusion of taxes are highest at the federal level and least at the local level. Rent-seeking through budgetary reallocation has followed the public purse. One explanation for the observed centralization of government in the 20th century may be that opportunities to concentrate benefits and diffuse taxes are highest at the federal level.     

Administrative problems of the provincial sales tax on beer in Papua New Guinea

With the establishment of provincial government in Papua New Guinea, the Organic Law has conferred on the provincial governments the authority to raise revenue using local revenue bases including retail sales taxes. These taxes have significant advantages and a sales tax on beer has particular benefits in P.N.G. in terms of potential yield and ease of administrative management. The tax is levied on the two breweries and the breweries collect the tax at their breweries and wholesale warehouses on behalf of the provincial governments. For the brewery with the dominant share of the market the arrangement under which it collects the tax for a commission and pays over quarterly to the provincial governments brings financial advantage. The brewery with a smaller share of the market and localized sales is less likely to be benefitting by the arrangement. For the future given expected beer consumption a change from a quantity based tax to ad valorem rates would be financially advantageous to the provincial governments, and would reduce the need for some provinces to seek tax sources elsewhere, but experience shows the general benefit of raising the tax, not at the point of final sale, but on the wholesaler or manufacturer.     

How Pollution Taxes may Increase Pollution and Reduce Net Revenues

This paper develops a positive theory of pollution taxation by a federal authority when pollution abatement subsidies are used by local governments. Environmental and industry lobby groups influence governments with campaign contributions. First, pollution may increase in the pollution tax because the abatement subsidy increases (decreases) with the tax, and pollution increases (decreases) in the abatement subsidy. This occurs because the lobbying incentives change at a pollution tax reform. Second, pollution taxes may reduce net revenues because subsidy expenditures rise. Third, pollution may increase simultaneously as net revenues fall. Finally, the welfare effect of a pollution tax may be negative.     

Superfund expenditures and cleanup priorities: Distributive politics or the public interest?

Using data on all final National Priorities List (NPL) sites, this study employs an integrated model of distributive and public interest politics to determine whether the overall pace of cleanup efforts and funding of the 8.5 billion Superfund program over the past eight years reflects self-interested congressional influence or public interest objectives. Despite the fact that both EPA and Congress have substantial incentives to promote the Superfund program, the results indicate that once a site is on the final NPL, there is little committee-based congressional influence over the distribution of site cleanup or funding, although evidence exists that legislators can hasten a site's transition from proposed to final status on the NPL. The chief determinants of cleanup pace and level of funding are the site's Hazard Ranking System (HRS) scores, whether federal funds are financing the cleanup, and whether the site is designated as a state priority.     

Is There a “Singles Tax”? The Relative Income Tax Treatment of Single Households

The existence of a "marriage tax," in which many married couples pay more taxes when married than their combined taxes as single individuals, is well known. However, largely lost in the attention devoted to married taxpayers is the treatment of single taxpayers. This article examines the relative tax treatment of single and married taxpayers. Various types of representative taxpayers are constructed, and the difference in income taxes paid by single taxpayers and married taxpayers is calculated. These calculations show that there is a "singles tax"; that is, a single individual typically pays a greater income tax liability than a married couple with identical income, especially when the main transfer programs are considered.     

Pigou and Clarke join hands

This paper develops a simple, incentive compatible, allocation mechanism by means of which both polluters and pollutees will reveal their preferences so that the government can determine the Pareto optimal pollution level. The mechanism involves a combination of the Pigou tax and the Clarke tax. The two taxes are complementary and together provide a practical solution to the environment problem. The mechanism is applied to the problem of finding the optimal quality of river water which serves both as a waste disposal and as a source of drinking water.     

Policy Regimes for the International Waste Trade

Among the unforeseen problems of the new industrial age has been the disposal of increasing quantities of wastes—many hazardous and toxic. Industrial chemistry has produced numerous products that, while useful, are alien to nature and resistant to biodegradation or detoxification. Growing public awareness of the possible hazards and risks involved in disposal of the residuals of industrial activities is arousing a popular demand for environmental protection. But this popular awareness depends upon public information and a degree of scientific literacy—conditions which vary widely among nations. Initial consequences are environmental regulations and restrictions respecting waste disposal in scientifically developed countries, and vulnerability among less developed countries to the export of hazardous wastes from the countries of their origin. A secondary consequence is the emergence of international waste trade as a national and international multidimensional policy problem.     

Beyond the NIMBY Syndrome in Hazardous Waste Facility Siting: The Albertan Breakthrough and the Prospects For Cooperation in Canada and the United States

The prospects for agreements in the siting of hazardous waste facilities in Canada and the United States would appear bleak given the repeated failures of the past decade. A variety of provincial and state siting approaches have been attempted, only to be thwarted regularly by local opposition. The most far–reaching exceptional case involves the siting of a comprehensive hazardous waste disposal facility in Alberta, Canada in the mid-1980s. The Alberta approach to siting differed markedly from those of other provinces and states and in many respects met the conditions necessary for policy cooperation specified by the maturing institutionalist and game theoretic literatures on this topic. The Alberta siting agreement has already demonstrated shortcomings in the implementation phase and may not be easily transplanted to other subnational units of government. Nonetheless, it suggests that the Not-In-My-Back-Yard Syndrome so familiar in hazardous waste facility siting need not be an inevitability and that careful attention to key aspects of siting policy may facilitate cooperation.     

Unintended Consequences of Local Sales Tax: Capitalization of Sales Taxes into Housing Prices

Local governments are under pressure to look for alternatives to property taxes as their main revenue source. One response has been to adopt local sales taxes. Prior studies offer little guidance on whether and how much local governments enhance their revenue capacity with local sales taxes. This article unveils the underlying mechanisms by exploring the capitalization of sales taxes into housing prices as a property tax base measure. The empirical analysis reveals a capitalization of local sales taxes into housing prices, indicating the reduction of property tax bases in higher sales tax areas from the long-term perspective. The findings suggest that a sales tax rate increase might not raise local revenue capacity as much as policymakers intend.     

The incentive effects of property taxes on local governments

This paper applies the ideas of Brennan and Buchanan (1977, 1978, 1980) to local property taxes. When local governments maximize their revenues, property taxes provide incentives for adequate amenity provision. Local amenity provision determines property values which then determine local tax revenues. As long as the demand for housing is inelastic, property-taxes will provide stronger incentives for local governments than lump-sum taxes. As current property values reflect expectations about future amenity levels, property taxes create incentives for even the most myopic government to invest for the future. Local property taxes can also act to limit the incentives of localities to tax; there are cases where higher levels of local property taxes lead to lower overall tax burdens. These ideas are applied to the tax reform in the late 1970s; one reason that tax reform may have been so successful is that in a period where land prices are driven by many forces other than government amenities, property taxes lose their value as incentive devices.     

Bullfrog County: A Nevada Response to Federal Nuclear-Waste Disposal Policy

One of the most significant intergovernmental issues today isthe disposal of high-level nuclear waste. Although there isconsiderable scholarly work on the subject, the emphasis hasbeen limited primarily to federal-state relations. Few observershave looked at the intrastate implications of the 1982 NuclearWaste Policy Act. This article attempts to do just that by focusingon the extreme action taken by the Nevada legislature in 1987when it created Bullfrog County, a zero-population county surroundingthe proposed waste repository site. The county was endowed withthe maximum property tax rate allowed under Nevada's Constitutionso as to enable the state to obtain additional funds from thefederal government in exchange for hosting the unpopular "dump."However, what began as a simple maneuver designed to extractthe maximum benefit for the state quickly produced politicaland legal consequences far beyond the intentions of the county'soriginal proponents.     

Changing the Federal Tax Philosophy: A National Value-Added Tax or Retail Sales Tax?

Moving the federal government from its heavy reliance on taxes on income and profits to taxes on general consumption has been proposed as a way to improve equity, economic efficiency, and transparency of the tax system. The value-added tax and the retail sales tax offer economically equivalent approaches to general consumption taxation, differing only in how they are administered. A comparison of the two taxes as they now operate, however, suggests considerable advantage for the value-added tax as a national revenue source. Only in terms of requiring fewer businesses to collect the tax is there an advantage to the retail sales tax. The value-added tax is superior or equivalent to the retail sales tax in other important fiscal criteria.     

Property Tax Responses to State Aid Cuts in the Recent Fiscal Crisis

Many states experienced fiscal crises at the beginning of this decade. Some responded by cutting state aid to local governments. This paper explores the extent to which local governments responded to these aid cuts by raising property taxes. The authors hypothesize that changes in aid help explain the observed differences in per capita property tax revenue changes across states. They find that on average school districts increased property taxes by 23 cents for each dollar cut in state aid. These results highlight the important role that the property tax plays in maintaining the stability of the state and local sector.