Ronald C. Fisher

Local sales taxes: Tax rate differentials, sales loss, and revenue estimation

Local sales tax rate differentials are evaluated in a theoretical model allowing for increasing cost industries and consumer transportation cost. It is shown that the tax rate differential variables used in previous research lead to an underestimate of the effects onjurisdiction sales and that the effects should vary by commodity type. Evidence for the District of Columbia metropolitan area partially confirms previous research findings that local tax rate differentials significantly affect sales locations, although ways of reducing this effect are indicated.

An Evaluation of the Recent Move to Centralize the Finance of Public Schools in Michigan

This article examines Michigans 1994-95 shift from its system of K-12 public education being funded largely by local property taxes, to it being funded predominately by statewide revenue sources. We briefly describe events that led up to the adoption of Michigans school finance reform and then go into some detail about the tax and revenue-sharing specifics. Since the structure of Michigans school finance reform is complex, somewhat unique, and likely to be considered as a model for other states to duplicate, this examination will assist policy analysts and policymakers throughout the United States. Other states considering similar reforms will benefit from the simulations we provide with regard to the likely long-run results of Michigans school finance reform.

State-Local Fiscal Behavior: Analysis of Interjurisdictional Differences, 1962-1987

Interstate differences in expenditures and effective tax rates are examined to see whether the pattern of differences has changed substantially over the past 25 years. The results show that there has been only very modest convergence of per capita expenditures and increased variation of effective tax rates. The pattern of state fiscal behavior is remarkably stable. However, by 1987, the variation in both fiscal measures was greater than expected, given the changes in interstate differences in economic conditions over this period.

The Incidence and Incentive Effects of Property Tax Credits: Evidence From Michigan

The objectives of this article are (1) to present the income and geogtaphic incidence of property tax credits in Michigan; (2) to evaluate the influence of localproperty taxes, local income, and credit parameters on those distributions; and (3) to measure the magnitude of the potential fiscal incentives created by the circuit-breaker program. The analysisis based on a 1% sample of Michigan individual income tax returns for 1976, 1977, and 1978 that includes all the necessary data to calculate circuit-breaker benefits for each taxpayer. It is shown that the credit is a progressive element in the states tax structure, that the credit primarily favors agricultural counties and counties with relatively higher property tax rates or property values, and that the credit generates large incentives to increase property taxes by reducing marginal property tax cost by about 24%.

Interstate variation in the use of fees to fund K-12 public education

Abstract In this paper, we first offer economic arguments in support of greater consideration of user charges to fund public primary and secondary education. Second, to better understand why these economic arguments have not had further influence, a regression analysis shows the factors responsible for the observed variance in public school use of charges across the United States in 1991–92. Measures of matching grant activity, average district size, percentage population of school age, educational attainment, political ideology, institutional restrictions on property tax and fee usage, local tax deductibility, and unaccounted for regional variations all help to explain interstate variation in school district user fees. Based upon the regression findings, we offer suggestions on how to increase reliance on public school user charges. Our review of US school district data from 1991–92 suggests that as much as 30 billion dollars in expenditures on auxiliary services, or about 13% of all public school expenditure, could be funded through fees.

An Analysis of State–Local Government Capital Expenditure During the 2000s†

Capital expenditure by subnational governments in the United States represents about two percent of GDP and 12 percent of state–local spending. Persistent differences among states exist in the amount and composition of this capital expenditure. This regression‐based research examines for the decade of the 2000s: (1) the factors affecting capital spending and interstate differences; (2) the effect of recessions; (3) the response to American Recovery and Reinvestment Act (ARRA) stimulus funds; (4) state and year fixed effects; and (5) investment for highways and K‐12 education. Aggregate capital expenditure is relatively stable, although it increased around recessions, with ARRA grants especially important and substantial state‐specific influences.

Intergovernmental Fiscal Relations

List of Figures. List of Tables. 1. Intergovernmental Fiscal Relations: Policy Developments and Research Prospects R.C. Fisher. 2. Intergovernmental Fiscal Relations: Concepts and Models D. King. 3. Tax Policy in an Intergovernmental Setting: Is It Time for the U.S. to Change? D.A. Kenyon. 4. Transfers in Federal Systems: A Critical Survey J. Petchey, et al. 5. Toward Increased Centralization in Public School Finance W.N. Evans, et al. 6. Intergovernmental Fiscal Relations and Social Welfare Policy T.J. McGuire. 7. Metropolitan-Area Fiscal Issues D. Netzer. 8. Intergovernmental Aspects of Growth and Stabilization Policy W.F. Fox, M.N. Murray. Index.

The changing state-local fiscal environment: A 25-year retrospective

State and Local Finances under Pressure explores the future of state and local government fiscal systems given the numerous pressures they face from economic, legal, technological, demographic and political forces. It explores how these multiple forces play out in terms of the changes state and local governments should and are likely to make.

Major State–Local Policy Challenges: Outside-the-Box Solutions Needed

In this broad and illuminating work, experts on public finance discuss innovations in state and local tax policy that have been implemented or considered over the course of the last three decades. The authors provide original work that analyzes whether state and local governments have ‘gone outside the box’ to deal with the strains of current public finances or have gotten along by adhering to the status quo. This book provides researchers, students and policy makers with evaluations and analyses by well-known scholars in the area of state and local public finance of actual practices and analysis of potential policy changes for the future.

Does Perception of Gas Tax Paid Influence Support for Funding Highway Improvements

The issue for this research is whether perception of the rate and amount of fuel taxes paid by an individual influences his or her support for funding highway improvements from any source of revenue. A survey of likely California and Michigan voters demonstrates that they often overestimate the rate of their state’s gasoline excise tax and the subsequent amount they are likely to pay for this tax in a month. Regression analyses show that voter misperceptions concerning the magnitude of state fuel taxes affect their views regarding an increase in funding to support highway investment proposals. A reasonable policy implication is that the adoption of proposals to generate additional funds for highway investment is more likely if accompanied by a campaign identifying the existing rate of the state’s gasoline excise tax and the relatively small amount of this tax paid by the state’s typical driver.