Diversifying Local Government Revenue in Bosnia-Herzegovina Through an Area-Based Property Tax

After a bitter and devastating war, Bosnia and Herzegovina is making slow but steady progress rebuilding its economy and government structure. As normalcy returns, the demand for government services invariably will continue to increase, especially at the sub-entity levels of government. Unfortunately, the current fiscal structure severely restricts the resources available to local governments. This article suggests that Bosnia and Herzegovina consider adopting a property tax as a means to provide much- needed revenue. After describing the current governmental and fiscal system that has evolved since the signing of the Dayton Accords, the authors discuss why an area-based property tax, rather than a more traditional property tax based on capital value or market prices, makes sense for this country in transition.     

State Government Expenditure Determinants and Tax Revenue Determinants Revisited

The primary aim of the research was to test the general hypothesis that many institutional and political variables affect fiscal outcomes; that the preferences of public officials, and the decision processes used to act on those preferences, matter. State government data (state only, not state and local) from 1980, 1985, and 1990 were used to specify state tax revenue and expenditure models. A previous (Merrifield, 1991) state tax revenue model identified many significant institutional and political variables, but it was based only on 1985 data (49 observations). The larger data set (147 observations), including better data for some of the variables, indicated that most of Merrifield's (1991) findings are robust. The state expenditure models facilitated a second test of the general institutional and political variable hypothesis, as well as the hypotheses about specific variables. The expenditure model also facilitated comparisons of expenditure and tax determinants, and comparisons with results published in the literature. Though there are some noteworthy differences between the expenditure and tax models, the expenditure models also supported many of the institutional and political variable hypotheses.     

Tax and Expenditure Limitations and the Fiscal Response of Local Government: Asymmetric Intra-Local Fiscal Effects

This article empirically investigates the effects of introducing statewide measures to limit the ability of local jurisdictions to raise revenue or make expenditures. It does so in intervals of five years over a 25-year period, using fiscal observations for 31,804 units of local government in 787 metropolitan counties across the contiguous United States. Specifically explored is the effect of tax and expenditure limitations on the variation in revenues and expenditures between general purpose governments and school districts within county areas. Rather than imposing a uniform constraint across jurisdictions, tax and expenditure limitations (TELs) are associated with increased variation across both general purpose and school district revenues and expenditures and, by implication, increased service differentials. Effects are found to be asymmetric, with increased variation greatest within counties comprising the urban core and those with relatively more disadvantaged populations. The implications are that TELs are most constraining on the ability of governments serving economically less prosperous and at risk populations to meet public service needs. Such differential effects are of more than questionable merit and are the result of the application of blunt instruments to what is often an undemonstrated need. The outcome impairs both the efficiency and responsiveness of the local public sector.     

Structure of State‐Level Tax and Expenditure Limits

While much consideration has been given to the approval process, base classification, and codification of tax and expenditure limits (or TELs), these factors tell us nothing about how they actually work. This study focuses exclusively on the technical elements of these limits and finds how states estimate their limits have over time eroded their potency. More specifically, if a state resets or rebases its limit annually by using actual revenues or expenditures for the preceding year, the limit will trend closely with actual revenues or expenditures, effectively restricting growth in spending as prescribed by law. However, if the law requires a state to estimate its limit using the appropriation limit for the preceding year instead of actual revenues or expenditures, that is, without rebasing, the limit will reflect cumulative changes to the base when it was first approved. Over time, the TEL cap is significantly above the states revenues or expenditures as it remains unaffected by the state's underlying fiscal and economic environment.     

Decentralizing a Centralized State: Local Government Finance in Chile Within the Latin American Context

A major issue in Latin. America is the decentralization of public finances and the autonomy of local government. This article begins with a brief review of the ongoing decentralization debate. We then discuss key features of local government finance and autonomy among unitary and federal governments in Latin America. Against that backdrop, we focus on the Chilean case, which has been a widely celebrated success story in the economic development literature. We argue that despite major gains by municipal governments over the past two decades, financial decision making powers still rest with the national government. This creates financial complacency among local governments. To remedy this, we conclude with six proposals for promoting effective decentralization.     

The Growth and Stability of the Local Tax Revenue in Japan

This paper estimates the elasticity of the local tax revenue in Japan and analyzes the growth and stability of the Japanese local tax system. The main estimated results are as follows. The growth taxes in the long run are the Individual Enterprise Tax and the Fixed Asset Tax. There are no stable taxes in the short run. The total amount of prefectural tax revenue is low growth in the long run and unstable in the short run. The total amount of municipal tax revenue is low growth in the long run and neutral in the short run. The total amount of the local tax revenue in the prefecture and the municipality does not have stability and growth.     

Institutional Differences and Local Government Performance: Evidence from Property Tax Assessment Quality

Abstract

This article examines the relationship between institutional differences embedded in local governance structures and government performance in the specific context of property assessment. In order to provide deeper insight into why certain governance structures perform better than others, we focus on the impact of nested levels of institutions—constitutional-level and substantive-level rules of governance—beyond the conventional perspective of the form of government. Based on panel data of cities and towns in New York State between 1993 and 2010, our analysis indicates that, among other institutional arrangements, municipalities employing the council–manager form with appointed assessors are most likely to achieve higher levels of assessment quality (uniformity) of the residential property. This indicates that having politically independent (more career-oriented), low-powered appointed governance structures rather than politically risk-averse (more voter-oriented), high-powered elected counterparts are more likely to be effective at reducing risk in tax equity issues, thus providing better financial performance.     

The Effect of Tax and Expenditure Limitations on Revenue Volatility: Evidence from Colorado

Much of the research on tax and expenditure limitations (TELs) focuses on the impact that limits have on the size of the public sector or the distribution of expenditures at the state and local levels. While these results shed light on the extent to which TELs succeed in reducing government spending, they do not have much to say about the impact of TELs on government budgeting or financial planning, despite the fact that voters support TELs in the hope of reducing government inefficiency (Courant, Gramlich, and Rubinfeld 1980; Ladd and Wilson 1982). This paper examines the effect of TELs on the stability of government revenues; sound tax policy entails controlling the volatility of revenues in order to plan more effectively for the future. Using panel data from Colorado's Division of Local Government as well as the Census Bureau's Annual Survey of State and Local Government Finances, this paper examines the impact of Colorado's 1992 Taxpayer's Bill of Rights (TABOR) on local government finances. Results from difference‐in‐difference estimation suggest that TELs increase revenue and expenditure volatility.     

An Evaluation of Alternative Tax and Expenditure Limitation Policies on Kansas Local Governments

Cross-sectional time series data in a partial adjustment model are used to examine county government fiscal behavior under a "hard" tax and expenditure limitation policy, an aggregate property tax levy limit, versus a "soft" limit under Truth in Taxation in Kansas. Results indicate that under the aggregate levy limit, per capita property taxes, own-source revenues and own-source expenditures were significantly higher than under the Truth in Taxation policy where local officials face many fewer restrictions on their ability to raise the levy.     

Democratic Representation and the Property Franchise in Australian Local Government

Australia remains one of the last liberal democracies to retain a property franchise at the local government level. This particular feature is both the result of historical particularities and contemporary political arrangements. This article analyses the property franchise in the City of Melbourne, the capital of the Australian State of Victoria, based on democratic theory and an empirical study. It illustrates the tensions between the democratic principles of representation and political equality in defining structures for representation at the local government level. The authors suggest that a more nuanced interpretation of representation can be adopted at a local level based on territorial residency rather than legal citizenship. Despite this, based on analysis of both electoral and non‐electoral mechanisms, the property franchises are found to be anachronistic and indefensible from a democratic perspective and unrelated to the status of capital city. The article concludes that, at a local level, deliberative democracy holds the promise to better represent various interests, including property interests.     

The Impact of Tax Revenue from Capital Gains Realizations on State Income Tax Revenue and Budget Conditions

We explore the effect of the rapid increase in capital gains realizations on state income tax revenue during the 1990s and 2000s, and the effect that this had on state fiscal decisions regarding the use of these revenue. We find wide variation in the growth of capital gains realizations across states and that the growth in capital gains had a significant effect on state income tax revenue for many states. We find that states used a sizable portion of the additional revenue from capital gains to fund reserves in the year the revenue was generated, and that capital gains revenue lead to some reductions in taxes but not to increases in expenditures. The evidence suggests that states were conservative in their use of capital gains related revenues.     

Effects of Federal Tax Reform on Local Finances

The federal Tax Reform Act of 1986 promised to be fair, simple,and revenue neutral to the federal treasury. Tax reform, however,was not revenue neutral with respect to all state and localtreasuries. Indeed, tax reform entailed a restructuring of thebalance of power in federal-state-local relations. In particular,new restrictions on the tax-exempt bond authority of state andlocal governments are requiring significant shifts in traditionallocal debt policy. Furthermore, the Supreme Courts recent decision,South Carolina v. Baker, raises additional concerns about thestatus of state and local tax-exempt bond issues. The natureof future relations between the federal government and localgovernments is likely to be molded more by the federal tax codeand by erosion in state authority over fiscal matters than byfederal grant-in-aid programs of the kind that have characterizedthe past quarter century of intergovernmental relations.     

Inertia and Neighboring Effects in Local Tax Policy: Illinois' Experience with a Local Option Tax on Telecommunications

Illinois reconfigured the legal basis and constraints for municipal telecommunications taxes in 2003. We use data on municipalities' initial (assigned) tax rate, fiscal condition, population, changes in tax rates of neighboring municipalities and neighbors' initial (assigned) tax rates to explain changes in telecommunications tax rates between 2003 and 2008. We find clear evidence of an important and statistically significant inertia effect—municipalities initially assigned a zero tax rate continued to stay tax free—and important and statistically significant neighboring effects—municipalities whose neighbors changed tax rates did the same, and municipalities whose neighbors were assigned relatively high initial rates increased their own rates faster.     

The Changing Property Tax in the West: State Centralization of Local Finances

Diminished local government autonomy and increased fiscal centralization in the hands of state government are the consequences of the restrictions on the local property tax imposed in the western states in the past twenty years. While the trend is a national one, it is more evident in the West than in other regions. Statewide voter initiatives account for some of the restrictions, particularly the more severe ones, but legislatures and governors also impose these limitations. In tracing the recent course of the centralization of local finance, this article details the property tax restrictions adopted in individual western states, examines the initiative and conventional legislative sources of these actions, and provides quantitative and qualitative evidence for the centralization thesis. In many western states the property tax has lost much of its local character, becoming in large part a fiscal and political tool for state policymakers.     

论税收的公平与效率原则及税制设计

税收是市场经济下政府组织财政收入的主要手段,一国税制设计应在满足财政收入前提下,尽量满足税收的公平与效率原则。税制设计如何在这二者之间取舍,经常引起经济学家和政策制定者的争议。发达国家关于最优所得税制的理论应该对我们有所借鉴。     

Context and Mechanisms in Administrative Reform Processes: Performance Management Within Italian Local Government

ABSTRACT

This article aims to present new research on the politics of public management reform in Napoleonic countries. Drawing on the institutional processualist approach, the empirical analysis tracks and explains the trajectory and outcomes of episodes where performance management has been introduced at the local level in Italy. The comparative case analysis shows that plausible causal explanation of the outcomes of public management reform can occur only if researchers are attentive to the interaction between social mechanisms and contextual features together with their interconnections through time.     

Do State‐Funded Property Tax Exemptions Increase Local Government Inefficiency? An Analysis of New York State's STAR Program

This study tests the effects of a growing form of indirect state aid—state‐supported property tax exemptions—on local government efficiency. We hypothesize that larger exemptions, by lowering the effective tax price paid by local homeowners and thus their incentive to monitor efficiency, will reduce local government efficiency. We test this hypothesis by examining the introduction of New York State's large state‐subsidized property tax exemption program, which began in 1999. We find evidence that, all else constant, the exemptions have reduced efficiency in districts with larger exemptions, but the effects appear to diminish as taxpayers become accustomed to the exemptions.     

关于加强政府非税收管理的思考

随着国民经济和社会各项事业的发展,政府非税收入规模不断扩大、结构不断变化,政府非税收入已成为国家财政收入的重要组成部分和我国经济建设的重要财力支柱,迫切需要我们在理论上重新认识政府非税收入的性质、特点和范围,在实践中规范其管理,使其在经济建设和各项社会事业发展中发挥应有的作用。本文拟就此问题谈点个人初浅的看法和意见。