Category Archives: Cities & Towns

Powerful Cities?: Limits on Municipal Taxing Authority and What to Do About Them

Source: Erin Adele Scharff, New York University Law Review, Volume 91 Number 2, May 2016

From the abstract:
Cities are once again on the rise and have become the site of major public debates, from income inequality and immigration policy to where and how Americans should live. While municipal leaders are often eager to fill the void in political leadership left by Congress and state elected officials, they are often hamstrung by state home rule laws, which define the powers states grant to municipalities. These laws limit, among other things, municipal taxing authority. Recently, local government scholars have wrestled with whether and how to grant municipalities more fiscal authority, but such scholarship has not provided a unified theory of municipal taxing authority.

This Article considers in detail whether and how to expand city taxing authority. It argues that state law should grant municipal governments “presumptive taxing authority.” This presumptive taxing authority would parallel municipal regulatory authority and be similarly subject to state preemption law. Such reform would open the door to more municipal revenue innovation, while ensuring that the state can vindicate its weighty policy interests.

Is the Philadelphia Wage Tax Unconstitutional? And If It Is, What Can and Should the City Do?

Source: Michael S. Knoll, Ruth Mason, University of Pennsylvania Law Review Online, Vol. 164, 2016

From the abstract:
Philadelphia has a complex and antiquated tax system that has long been criticized for driving employers and jobs away from Philadelphia by making it expensive to conduct business in the City. The centerpiece of the Philadelphia tax system is the Philadelphia wage tax, which raised more than $1.6 billion in 2014. That tax has been challenged as unconstitutional in light of the Supreme Court’s 2015 decision in Wynne v. Comptroller of Maryland, which struck down a structurally similar Maryland tax. This Essay explains the constitutional challenge to the City wage tax, argues that the tax is unconstitutional, describes steps the City could take to save that tax, and raises the question of whether Philadelphia should save or eliminate its wage tax.

Cities seek to regulate Airbnb to collect lodging taxes

Source: Jason Axelrod, American City and County, May 11, 2016

As community-driven lodging rental site Airbnb continues exploding in popularity, several cities across the U.S. are seeking to regulate its activities at various levels.

Virginia Beach, Va. estimates it is losing over $200,000 in annual taxes because of Airbnb’s activities in the city, according to WTKR. City officials have tried to get the company to identify who in the city has been renting properties so it can pinpoint who to tax, but 18 months’ worth of talks have been stalled….

A Glimmer of Optimism in Government Savings Accumulation? An Empirical Examination of Municipal Unassigned Fund Balance in Florida

Source: Theodore Arapis, Vincent Reitano, Public Finance Review, Published online before print April 21, 2016
(subscription required)

From the abstract:
Few would question that the Great Recession and its aftermath have proved challenging for government financial management. This depressed economic environment has renewed interest in research involving the accumulation and use of the unassigned fund balance. In this study, we use data on Florida cities to examine the factors affecting the unassigned fund balance before, during, and after the Great Recession. According to our findings, building and maintaining savings at high levels have become routine for Florida cities, irrespective of their government form and the economic conditions they face. This research also provides evidence that Florida cities adapt their savings accumulation strategy, depending on the level of unassigned fund balance they are targeting. As a result, Florida cities consider different factors when accumulating unassigned fund balance above, rather than within or below, the minimum range suggested by the Government Finance Officers Association.

Assessing Local Government Capacity for Implementing Sustainable Transportation: The Role of Political Culture

Source: Aiden Irish, International Journal of Public Administration, Published online: April 6, 2016
(subscription required)

From the abstract:
Transportation development increasingly relies on local governments to implement sustainable strategies, yet implementation success varies widely. This begs an important question, why are some cities successful and others not? In response, this study focuses on the political culture characteristics of city leadership and staff pertaining to sustainable transportation. Employing semi-structured interviews with officials in two case study cities—Pomona and Pasadena, California—the study identifies and traces the impact of cultural characteristics on network interactions and the resulting transportation innovation. Finally, this research suggests key political and department characteristics that contribute to political cultures that facilitate sustainable transportation development.

The Use of Social Media Policies by US Municipalities

Source: Lamar Vernon Bennett & Aroon Prasad Manoharan, International Journal of Public Administration, Published online: March 31, 2016
(subscription required)

From the abstract:
As the use of social media technologies becomes ever more ingrained in the day-to-day functions of public organizations, it is important to develop relevant social media policies to guide their effective use and enable increasingly transparent engagement with citizens. Analyzing the content of such policies can inform scholars about the intended purpose of government’s use of social media. Hence, to build the foundation for a research agenda focused on the role of policy in government’s ability to effectively engage citizens, this exploratory study first identified 156 US cities with a recognizable social media presence and then employed a content analysis to analyze the key elements of their social media policies. Based on our findings, most cities have integrated social media into daily operations, however, many do not provide effective social media policies to guide such use.

Beyond North Carolina’s LGBT Battle: States’ War on Cities

Source: Alan Greenblatt, Governing, March 25, 2016

North Carolina’s fight over LGBT protections is part of a larger recent shift in political dynamics: States are thwarting local laws any chance they get — while simultaneously complaining about federal intrusion on their own. ….

….If a state official doesn’t like a city’s policy, there’s little penalty involved in trying to block it. A tax on earnings may be an essential source of revenue for St. Louis, but voting to kill it allows a legislator from outstate to take an anti-tax stand essentially for free. It won’t in any way affect revenues or programs back home. The same pattern of state legislative indifference to urban desires holds true for spending decisions. Consider infrastructure. The percentage of urban roads that have “poor pavement quality” has increased more than 50 percent over the past decade, according to the Congressional Budget Office. When it comes to public transit — and light rail in particular — state officials have been abandoning projects pretty decisively in recent months…..
Growing Southern cities are increasingly targets of state pre-emption
Source: Institute for Southern Studies, April 1, 2016

Fiscally Standardized Cities (FiSC) database

Source: Lincoln Institute of Land Policy, March 2016

From the press release:
As local governments continue their struggle to recover from the Great Recession, the Lincoln Institute of Land Policy has expanded a signature interactive database to allow for the meaningful comparison of finances across 150 U.S. cities, just one piece of a larger effort to make public finances more transparent.

With the addition of 38 new cities, the Fiscally Standardized Cities (FiSC) database now includes at least two cities in all but two states, allowing for a broader analysis of how the nation’s largest cities pay for public services, from schools to police to public works….

….In addition, the Institute will unveil a new Municipal Fiscal Health Dashboard, which will provide a visualization platform for the FiSC database, incorporate additional financial and demographic data, and add features such as a liquidity calculator, another step toward greater fiscal transparency….

The Real Reason Middle America Should Be Angry

Source: Brian S. Feldman, Washington Monthly, March/April/May 2016

Like many “flyover” cities, St. Louis’s decline is not mainly a story of deindustrialization, but of decisions in Washington that opened the door to predatory monopoly. ….

…. Experts often point to manufacturing decline, off-shoring, and racial strife to explain the relative economic weakness of St. Louis and other Rust Belt cities. But these ills hardly have afflicted St. Louis more than they have Chicago, New York, Boston, and Los Angeles—which all have mounted much stronger comebacks in recent decades. Yes, those other cities made the transition from manufacturing to services and technology. But a quarter century ago, St. Louis was already (and, to some extent, it still is) a hub of many of the post-industrial industries that have gone on to experience the fastest growth, from pharmaceuticals to finance to food processing. ….. The relative decline of St. Louis—along with that of other similarly endowed heartland cities—is therefore not simply, or even primarily, a story of deindustrialization. The larger explanation involves how presidents and lawmakers in both parties, influenced by a handful of economists and legal scholars, quietly altered federal competition policies antitrust laws, and enforcement measures over a period of thirty years. These changes, which enabled the same kind of predatory corporate behavior that took the Rams away from St. Louis, also robbed the metro area of a vibrant economy, and of hundreds of locally based companies. This economic uprooting, still all but unaddressed by today’s politicians or presidential candidates, accounts for much of the relative stagnation of other middle American communities, and for much of the anger roiling voters this election cycle. The rise and fall of St. Louis’s advertising industry stands as a cautionary tale for what ails so many of the once vigorous and innovative cities of “flyover” America. …..

2015 Metro Job and Gross Metro Product: 2016 Forecast

Source: IHS Global Insight, January 2016

The National Economy:
– GDP growth will accelerate this year as some of the drags on the economy (including the inventory cycle and the plunge in energy-sector capital spending) ease. Real GDP growth will improve from 2.4% in 2015 to 2.7% in 2016.
– Recent data confirm the mostly sound foundations of the US economic recovery—solid growth in consumer spending and housing, but pain in parts of the manufacturing sector because of a strong dollar and an inventory cycle.
– Consumption will grow a healthy 3.0% in 2016, following 2015’s 3.1% rate.
– The Federal Reserve, confident in the recovery’s sustainability, will raise the fed funds rate by 1.0 point over the course of the year.
– A much needed and long awaited productivity revival has begun. As a result, while GDP will accelerate, employment growth will slow from 2.1% in 2015 to 1.7% this year.
– Increasing labor force participation will keep the unemployment rate from falling much further. It will drop from 5.0% to 4.9% this year.

US Metro Economies Gross Metro Product (GMP):
– Nearly all (363) of the nation’s 381 metro areas are projected to experience real (inflation adjusted) economic growth in 2016, up from 331 in 2015.
– 96 US metros (25%) are projected to see real economic growth (GMP) of 3.0% or higher in 2016; 233 metros (61%) in 2016 are expected to have real GMP growth of 2.0% or higher.
– 337 metros (88%) are expected to see real growth of 1.0% or higher, compared to 277 metros in 2015.

– At the end of 2015, 232 metros (61%) had more jobs than they did prior to the Great Recession, while 49 had not
– 21 more metros are expected to return to their pre-recession job levels in 2016, leaving 128 still below their pre-recession peak
– Nearly all US metro areas (344) are projected to have positive job growth in 2016.
– Only 17 metros will see job growth of 3.0% or higher; 87 are forecast to see job growth of 2.0% or higher.
– 231 metros (61%) have a projected job growth of 1.0% or higher in 2016, compared to 262 metros which saw 1.0% or higher in 2015.