State Rules and the County-City Arena: Competition for Land and Taxes in California's Central Valley

The vulnerabilities and strategies of county governments inthe American intergovernmental system are explored in this studyof California counties in the post-Proposition 13 era. The propertytax limitations of the 1978 ballot measure have combined witha number of other state fiscal, programmatic, and boundary rulesto constrain county finances. The rules encourage cities topursue growth policies, including annexations and redevelopment,that contribute to county constraints. However, the rules lsoprovide some intergovernmental tools for counties, as illustratedhere by case studies from three Central Valley counties. Employingtheir land-use powers and ability to block annexations, thecounties were recently successful, to varying degrees, in establishingrevenue-sharing agreements with their cities     

State Policies Affecting Cities and Counties in 1991: Shifting Federalism

States experienced considerable fiscal distress in 1991 as the recession led to widespread revenue shortfalls. In this environment, discretionary spending did not fare well. This article discusses five major policy areas: (1) state financial aid; (2) major changes in the "sorting out" of responsibilities between the state and local governments; (3) revenue diversification; (4) changes in limitations imposed on local taxes; and (5) new mandates handed down to cities and counties.     

Unfunded Mandates and Fiscal Structure: Empirical Evidence from a Synthetic Control Model

An unfunded expenditure mandate occurs when governments are required to provide a good or service by a higher level of government without an accompanying revenue source. There are no empirical studies providing causal evidence on the fiscal influence of intergovernmental mandates. This article examines Florida's 1990 constitutional Amendment 3, which sought to limit unfunded state mandates on municipal and county governments. The synthetic control method, an empirical technique for drawing causal inferences from case studies, estimates the effect of Amendment 3 on state expenditures and total transfers to local governments. The results indicate that state expenditures increased by an annual average of 9.5 percent, while state transfers to all local governments were unaffected. However, the municipalities protected by Amendment 3 saw intergovernmental revenue from the state decrease by 10 percent annually, which suggests that remaining mandates likely targeted special districts, encouraging the fragmentation of local public service delivery.     

State support under the new federalism

The new federalism will reduce total intergovernmental revenues to local governments. The reduction will be due to both the transfer to the states of much of the federal aid which previously flowed directly to local governments and reductions in total federal aid levels. Pass-through requirements on the shifted aid will not affect this general result but may soften the impact in many states. Because of differences in the extent to which state governments substitute federal pass-through aid for state aid from own-source revenues and in the degree to which different sources of revenues are treated differently by the states, local revenue reductions will vary greatly from state to state. The losses for local governments will range from 100% of the shifted aid in some states to as little as 15–20% in others.     

The Fiscal Consequences of Changing Federal and State Revenue Policies: The Case of Small Oregon Cities

This article examines the fiscal consequences for twelve, smallOregon cities of recent changes in federal and state intergovernmentalrevenue policies. Many small local governments have experienceddouble revenue reverses in recent years—reductions inown-source revenues because of economic decline as well as decreasesin intergovernmental revenues, especially federal aid. The twelvesmall cities are compared with all 241 cities in Oregon andthe 136 Oregon cities in the 1,000 to 49,999 population range.Using aggregate and interview data, a major finding is thatalthough stabilization and/or decline in federal-state revenuesharing and entitlement program funds have accentuated difficultlocal revenue situations, economic decline has been the moreimportant contributor to the fiscal stress of the twelve smallmunicipalities. Most of the twelve cities had limited fiscalcapacity—as indicated by low assessed property valuations—makingit difficult to produce sufficient revenue to meet basic publicservice needs. These cities were also unable to get citizenapproval of increases in property taxes.     

Local Government Complexity: Consequences for County Property-Tax and Debt Policies

This article examines the consequences of local government complexityon county revenue decisions in fourteen Texas counties comprisingthe Dallas-Fort Worth and Houston metropolitan areas. Thereare significant differences in the configuration of local governmentsin the two areas traceable to when cities, school districts,and special districts were created. County revenue decisionsare also affected by the different configuration of governmentsin the two areas. These findings challenge the conventionalwisdom that states create local governments. Local choices areinstrumental in shaping local government complexity. What government-typesare chosen, and when, produce distinctive patterns of governancefrom one metropolitan area to the next, even in the same state.Consequently, reforms aimed at making the county the "localgovernment of the future" would require perhaps insurmountablechanges in state and local structures     

Taxation by Citation? Exploring Local Governments’ Revenue Motive for Traffic Fines

Anecdotal evidence suggests that local governments may have a revenue motive for traffic fines, beyond public safety concerns. Using California's county-level data over a 12-year period, this article shows that counties increased per capita traffic fines by 40 to 42 cents immediately after a 10 percentage point tax revenue loss in the previous year; however, these counties did not reduce traffic fines if they experienced a tax revenue increase in the previous year. This finding indicates that county governments probably view traffic fines as a revenue source to offset tax revenue loss, but not as a revenue stabilizer to manage revenue fluctuation. This article also finds that low-income and Hispanic-majority counties raised more traffic fines. Counties that generated more revenue from the hotel tax—a tax typically paid by travelers and visitors—raised more traffic fines, indicating a possible tax-exporting behavior by shifting the traffic fine burden to nonlocal drivers.     

Intergovernmental Structure and Fiscal Management Strategies: A Crossnational Analysis

Does intergovernmental structure have a systematic effect on the impacts of local governments' fiscal policy responses? Using empirical data from more than 800 local governments in five countries, the article concludes that intergovernmental structure is associated with the impact attributed to various fiscal management strategies. Such strategies have generally had greater impact in local governments in federal systems than those in unitary state systems. There are similarities between federal and unitary local governments regarding the fiscal management strategies that have least impact, and both types stress the importance of productivity gains via technology. But the differences in relative importance and level of impact are more striking than the similarities. In particular, fiscal management strategies involving the relations of the local government with other governments, such as obtaining intergovernmental revenue and shifting service provision to other governments, have greater impact in significantly more federal systems than in unitary state systems. These federal local governments also experience greater impacts from increasing user charges and raising local taxes. In contrast, local governments in unitary state systems place greater reliance on the more politically expeditious strategy of across–the–board expenditure reductions and on reductions of capital spending. These findings suggest that local governments in more decentralized systems have greater flexibility to manipulate relations with other governments in order to enhance their own fiscal situation. The data also suggest that the government's level of fiscal stress is not systematically associated with the level of impact from most fiscal management strategies, especially in the unitary state systems.     

State Policies Affecting Cities and Counties in 1992

Most states did not make major changes in their policies affecting cities and counties in 1992. California and Maryland are the two leading exceptions. As many states continued to experience fiscal stress, fourteen states cut aid to local governments, while ten states increased aid. Some important changes also occurred in local revenue authority, sorting out responsibilities, and restrictions on unfunded mandates.     

转移支付对地方财政收入稳定效应的实证分析——基于中国省市县三级面板数据

从理论上讲,政府间转移支付可以作为稳定政策工具发挥作用。尤其自1994年以来,中央对地方的转移支付已成为地方各级政府重要的财政收入来源,然而,对于转移支付在财政收入稳定性方面发挥的作用,无论是政策制定者和学术研究者均没有注意到。为此,本文利用1993-2005年中国7个省861个县（区）的财政面板数据,把偏离趋势值变动的比率作为因变量,运用固定效应模型和Prais-Winsten模型或者Cochrane-Oreutt模型,实证分析了转移支付对省、市、县（区）财政收入稳定效应。实证结果表明转移支付对省、市、县（区）财政收入有较大的拉动作用,而且当财政收入处于下降阶段时,转移支付的稳定效应更加明显。所以,有必要重新反思政府间转移支付的目标,将其稳定作用纳入政策制订目标和实施效果的考虑范围,并考虑把转移支付作为稳定地方财政的一种政策工具。     

How Municipal Property Tax Responded to State Aid Cuts: The Case of Massachusetts Municipalities in the Post‐2001 Fiscal Crisis

This empirical study examines municipal property tax responses to state aid cuts during the post‐2001 fiscal crisis. Using panel econometric techniques on annual changes in property tax levy by 351 incorporated Massachusetts municipalities in the period of 2002–2006, the results suggest that municipal governments offset about 9 cents of each dollar of net state aid cut through the increase of their property tax rates. It contributes to public finance literature on the extent to which local property tax can be used to stabilize municipal revenues when the intergovernmental revenue shrinks.     

The Fiscal Impact of Federal and State Aid to Large U.S. Cities: An Empirical Analysis of Budgetary Response

This article examines four types of aid programs to thirty-nine large U.S. cities federal revenue sharing, federal categorical aid, state general aid, and state categorical aid. The central finding is that there is significant variation in the magnitude of property tax reduction resulting from different types of state general aid. Property tax credits and exemptions are less effective approaches in reducing local property taxes than are state lump-sum aid or city use of piggybacked taxes Categorical state and federal aid mostly fund additional city spending and have small but important stimulative effects on the revenue side These results suggest that differences in the design of aid programs have important implications for their fiscal impact and their effectiveness in reducing property taxes.     

County Compliance with North Carolina's Solid-Waste Mandate: A Conflict-Based Model

This article presents the findings of research on the implementationof intergovernmental mandates. A framework is developed fromempirical and theoretical work in conflict management to assessthe response of government actors in the implementation of aspecific mandate—North Carolina's Solid Waste ManagementAct of 1989. Our expectation is that the imposition of a mandateby the state on local governments would produce conflict andcontention, especially if the mandate is not accompanied byfunding. However, this study indicates that state and localgovernments may be able to overcome a single-minded concernfor their own interests and take on a problem-solving attitudeduring the implementation process. In addition, evidence indicatesthat county governments that take a problem solving approachare more likely to achieve the intended policy outcomes, producingthe potential for win-win results for the state and its counties.     

Financing Homeland Security and Emergency Preparedness: Use of Interlocal Cost‐Sharing

Before this study, much of the research on interlocal collaboration has focused broadly on interlocal service agreements, of which interlocal cost‐sharing is but one dimension. This study is one of the first to examine the nature of interlocal cost‐sharing agreements for a specific (and critically important) functional area. A mail survey of Florida city and county finance officers finds that the most common interlocal cost‐sharing partnership is between local general purpose governments rather than with local special purpose governments. The strongest incentives for interlocal cost‐sharing are (1) inadequate funding for emergency management in a jurisdiction's capital budget, (2) the perceived inadequacy of federal and/or state homeland security funding, and (3) greater faith in horizontal (local‐to‐local) than vertical (federal‐state‐local) intergovernmental agreements. The research also highlights the importance of asking fiscal condition survey questions in a more functionally specific manner rather than as an “overall fiscal condition” question.     

Models of Performance-Measurement Use in Local Governments: Understanding Budgeting, Communication, and Lasting Effects

While attention has been paid to a few cities and counties exhibiting effective performance measurement systems, most U.S. local governments have been active in the development and use of performance measurement for several decades. This research examines the effects of performance-measurement information on budgetary decision making, communication, and other operations of U.S. local governments. Data are drawn from a national survey of city and county administrators and budgeters that included nearly 300 governments. Findings indicate the use of performance measurement by local departments is pervasive, although survey respondents are less enthusiastic about measurement effectiveness. Study results show subtle distinctions between city and county officials in their use of performance measurement for budgetary purposes and processes. Research findings indicate the consistent, active integration of measures throughout the budget process is important in determining real budget and communication effects in local governments.     

Reporting on the Control Structures of Local Government Under the Single Audit Act of 1984

One of the major objectives of the Single Audit Act of 1984 (SAA) is to improve the financial management of local governments (Public Law 98–502, 98 Stat.2327). The purpose of this study is to examine how local governments have responded to the SAA and to provide some evidence concerning the extent to which the SAA is accomplishing its stated objectives. This study examines what auditors have reported with respect to the control structures of local governments and considers the extent to which control structures changed over the first four reporting years under the SAA. Differences in the frequency of reported weaknesses are examined across the four years and between types of government-counties and cities-and types of auditors- large and small public accounting firms and state auditors. The study also considers the extent to which reported weaknesses were corrected. The research findings reveal that auditors reported considerably more control weaknesses in counties than in cities, and the frequency of control weaknesses reported declined significantly over the first four reporting years under the SAA for city governments but remained relatively constant for county governments. In addition, there were significant differences in the frequency of control weaknesses reported related to the type of auditor.     

Tax and expenditure limitations and the fiscal relationships between state and local governments

This paper uses comprehensive data on state and local tax and spending limitations for forty-nine states between 1976 and 1990 to estimate the effects of these limits on the fiscal relationships between state and local government. Results indicate that tax and spending limits on local governments are only partially effective in reducing revenues because political agents bypass limitations by transferring revenue reliance to unconstrained revenue sources, or because unconstrained levels of government take on additional revenue responsibilities. In particular, the empirical analysis demonstrates that binding local government fiscal constraints are associated with reductions in local revenues and increases in state aid to local governments. In contrast, state government limitations are related to reductions in both state and local own source revenues.     

A Model of Asymmetries in the Flypaper Effect

In this applied research study we examine the changing fiscalrelationship between state and local governments. Our researchquestion is simple: Do local governments treat state aid duringperiods of stability and instability in a systematic manner?Using data on Wisconsin's unconditional shared revenues programfrom 1990 to 2000, we find evidence of a flypaper effect andthat the relationship tends to be asymmetrical. The manner inwhich local governments treat intergovernmental aid is differentbetween periods of increases and decreases in aid. Specifically,using a model that allows for the identification of structureshifts we find evidence of fiscal replacement. In addition,we find that changes in aid impact types of spending differently.When aid is reduced, policymakers appear to be less inclinedto cut police and fire services than they are to cut servicessuch as parks and recreation.     

Mandates and Management Challenges in the Trenches: An Intergovernmental Perspective on Homeland Security

Scholars and practitioners agree that homeland security policy implementation is contingent on a strong system of intergovernmental relations. The responsibilities associated with the homeland security mission, often mandated, cut across federal, state, and local boundaries. Local-level stakeholders are especially important players in the implementation process. This article presents a local perspective on the way intergovernmental relations have changed—and the reasons for those changes—since 9/11. Results of a survey of county and city officials in Florida provide evidence that intergovernmental cooperation has improved as a result of federal and state mandates. These results are refined by an analysis of the effects of specific local characteristics and the quality and quantity of vertical and horizontal networks on intergovernmental cooperation and local preparedness. Homeland security appears to be a policy area in which mandated cooperation and coordination—in a time and place of urgency—have actually strengthened the intergovernmental system.     

Water and Federalism in the 1990s

Federalism has always been an issue in water management. Thephasing out of grants for the construction of sewage treatmentplants, the reduction of the federal contribution for constructionof water development projects, the decrease in federal expendituresfor basic water data collection, and the lack of federal fundsfor state dam-safety programs have all had an impact on watermanagement and intergovernmental relations. This article summarizescontemporary issues in intergovernmental relations and waterpolicy. First, the relationship between water, environmentalprotection, and federalism is examined. Then, the shifting financialresponsibility for water pollution control from the federalto state and local governments is reviewed.