Craig S. Maher

Assessing the Relationship Between Objective and Subjective Measures of Fiscal Condition Using Government-Wide Statements

Government Accounting Standards Board (GASB) Statement 34 has been in effect for a decade yet there is limited research examining government-wide financial reporting data. This study builds on our ability to delve into the fiscal condition of Wisconsin counties during the Great Recession. The principal aims of the research are: (1) expand on works utilizing GASB 34 reporting requirements; (2) report on county administrators perceptions of fiscal condition; and (3) examine the relationship between subjective and objective measures of fiscal condition. We find little evidence that objective fiscal condition indices are related to subjective administrative assessments of fiscal condition.

Changing education finance policy, school referenda activity, and success rates: Evidence from Wisconsin

In this article, we use data on Wisconsin school referenda over the 1991– 2004 period to examine how changes in education finance affected school referenda activity. Beginning in 1996–1997, state officials in Wisconsin altered the average state share of school costs from about one-half to two-thirds. Because the state equalization aid formula depends on the school district tax base and per pupil spending, the policy change resulted in some districts receiving up to 80–90 percent state funding for school district spending. However, a requirement for capital project approval is that school districts place such proposals on the local ballot. We find evidence that changes in tax prices associated with the modified state aid formula altered school district referenda success rates across school districts. In particular, we find that in districts where the state aid formula further encouraged own source spending, the probability of referenda success increased.

Government, Effectiveness, Performance, and Local Property Values

Abstract We offer a practical measure of local government effectiveness in the provision of public services relating service expenditures to aggregate property value. Building on the work of Brueckner (1979, 1982, 1983) and Henderson (1990, 1995) we present an aggregate property value maximization model where levels of local public services are capitalized into aggregate property values. Using data for Wisconsin municipalities we demonstrate that service expenditure levels, and simultaneously corresponding taxation levels, are suboptimal and should be increased. The aggregate property value maximization test suggests that local public services in Wisconsin are consistently under-provided. By monitoring local property values officials can objectively measure if public services are being provided in an optimal manner.

Voter Responses to Referenda Seeking to Exceed Revenue Limits

Following voter approval of Californias Proposition 13, a body of research has attempted to explain referenda outcomes aimed at restricting public sector tax and spending authority. Evaluating the determinants of voter attitudes toward referenda to exceed spending/revenue limits, however, has received little attention. Using data for all Wisconsin school districts, we examine the outcomes of referenda to exceed revenue caps. A key finding of our research is that when voters support bonding for capital expenditures, they tend also to approve referenda to override revenue limits. This enables school districts to cover new operating costs often associated with new capital projects.

Testing for Fiscal Illusion in Wisconsin Towns

Abstract Fiscal illusion, a theory of the impact of government revenue structures on voter decision-making, has been studied extensively by economists and political scientists; however, empirical verification has been limited. This study builds on Lowerys (1987a) work by examining the relationship between suggested illusionary revenues and measures of electoral stress. Here, electoral stress is measured as constituent contacting—one possible measure of voter influence—for local government officials up for re-election. Using a combination of survey data from over 1,000 Wisconsin town board members, audited fiscal data and U.S. Census data, we were able to test for fiscal illusion. Our findings show that when looking at five revenue types (conditional grants, unconditional grants, property taxes, user fees and charges, and debt service) there is some evidence suggesting officials seeking another term in office will tend to support fees and charges as a revenue structure over other structures. Overall, there is little consistent evidence suggesting that elected officials are manipulating revenue structures for electoral gain. Revenue structures are mostly influenced by social and economic factors, such as median household income, population changes, and per capita property valuation.

Is the treatment of intergovernmental aid symmetric

In this note we use a variable parameter model to test for asymmetries in the treatment of intergovernmental aid. The central question is whether local government officials treat intergovernmental aid differently during periods of aid certainty and uncertainty. We find evidence of fiscal replacement for 94% of Wisconsin municipalities and fiscal inducement for only a small handful of municipalities. The lower the dependency on shared revenues, the higher the odds that the municipality will replace lost shared revenues with own source revenues.