America’s financial system has undergone a severe shock that is still cascading throughout the real economy. As financial institutions, their investors and homeowners have lost several trillion dollars, the combination of a contraction in asset values, declining consumer and business demand, and a weakened credit system have pushed the economy into a classic downward spiral. In the absence of heroic government measures, the financial crisis will lead to a serious general depression. Yet very substantial public spending and recapitalization of the nation’s financial system, though necessary, are not sufficient. These measures must be combined with comprehensive regulation.
The United States Congress has recognized the dangers of inattention and delay and has asked for assistance to re-envision the way the federal government funds and finances our national surface transportation infrastructure. Congress established the National Surface Transportation Infrastructure Financing Commission to provide recommendations for policy and action. This report offers the results of the Commission’s investigative efforts and deliberations. It provides a new framework for consideration by policy makers with responsibility for financial stewardship of the nation’s surface transportation network–and for all Americans traveling that network through cities and rural areas from coast to coast.
The Highway Account within the Highway Trust Fund is the primary mechanism for funding federal highway programs. The account– administered by the Federal Highway Administration (FHWA) within the Department of Transportation (DOT)–channels about $33 billion in highway user excise taxes annually to states for highway projects. Although DOT and others projected that the account could run out of funds in fiscal year 2009, the balance fell more rapidly than expected and a shortfall became imminent in August 2008. In September, Congress passed legislation to provide $8 billion to replenish the account, but DOT officials anticipate the account could reach a critical stage again in fiscal year 2009.
This report (1) describes the events that led to the decline in the account balance, including how DOT responded, and (2) identifies potential improvements in mechanisms to manage account solvency. This report also includes information on strategies GAO has reported on in the past that could be used to better align account outlays and revenues. To conduct this work, GAO analyzed information in legal and budget documents, reviewed account estimates, and interviewed agency officials and stakeholders.
Source: MAPLight.org, 2009
MAPLight.org, a groundbreaking public database, illuminates the connection between campaign donations and legislative votes in unprecedented ways. Elected officials collect large sums of money to run their campaigns, and they often pay back campaign contributors with special access and favorable laws.
This common practice is contrary to the public interest, yet legal. MAPLight.org makes money/vote connections transparent, to help citizens hold their legislators accountable.
MAPLight.org combines three data sets:
* Bill texts and legislative voting records
* Supporting and opposing interests for each bill
* Campaign contribution data from the Center for Responsive Politics and the National Institute on Money in State Politics
Combining this data makes visible key information that could never before be determined easily. For example:
* Contributions given by interests supporting and opposing each bill
* Average donations given to legislators voting Yes and No on each bill
* Timeline of contributions and votes for each bill, graphically identifying when legislators received large donations before or after their vote.
Source: John Lund, Industrial Relations Journal, Vol. 40 no. 2, published online February 20, 2009
From the abstract:
The underlying policy objectives and the degree to which they are served by current trade union financial reporting and disclosure regimes in the US and the UK are examined in this article, along with a detailed comparison of the government oversight agencies, annual disclosure forms and member access to union financial records.
West Virginia spends millions of dollars annually on public subsidies to private businesses in hopes of creating good-paying jobs. Yet evidence abounds of private companies cutting jobs after receiving state tax credits and low-interest loans. In extreme cases, corporations have gained or used their subsidies illegally, as in the indictment last year of the former chief executive of Sequelle Communications. More common, however, are companies that simply fail to deliver on their job-creation promises, often without consequences from the public agencies that fund them.
Accountability for Economic Development Subsidies
This report examines ways for the state to improve the return on its job-creation investments. Two specific issues are explored: the availability of information to policymakers and the public about business subsidies (transparency), and how well the recipients of business subsidies deliver on their pledges to create jobs (accountability).
Source: Roxana Radulescu, Martin Robson, Labour, Vol. 22, Issue 4, December 2008
From the abstract:
Conventional wisdom is that a high trade union bargaining strength and a system of coordinated wage bargaining reduce the attractiveness of an economy as a location for foreign direct investment, although there is limited evidence for this. The paper takes panel data for 19 OECD economies to examine the relationship between trade union bargaining strength, bargaining coordi nation, and a range of incentives for inward foreign direct investment. It finds a strong negative effect of trade union density on inward foreign direct investment, which is dependent on the degree of wage bargaining coordination. A high degree of coordination weakens the deterrent effect of high union density, which is consistent with the notion that under certain circumstances a coordinated increase in wages can increase profits of the multinationals by hurting domestic firms.
October 2006 version
This report examines the transportation funding issues states are faced with, the finance options available to them, and how states can decide which options best fit into their transportation plans. It draws on the work of two federal commissions created by Congress–the National Surface Transportation Infrastructure Financing Commission and the National Surface Transportation Policy and Revenue Study Commission–as well as the research and assessment of numerous other transportation, law and tax policy analysts, expert panels, and state and federal officials.
Most states have begun to look at and even implement innovative ways to fund transportation. Their efforts come with the realizations that raising fuel taxes is politically difficult and that the future revenue yield from existing funding sources will be inadequate to maintain the nation’s existing transportation systems and to increase capacity for the future.
A strong financial sector is a necessary component of a robust economy. Financial markets and institutions channel funds from savers to borrowers who need the money to build businesses and hire workers and to buy homes and other goods and services. Indeed, credit is often required to support the ordinary operations of businesses–for example, to finance their inventories and to meet payrolls before payments are received. If the customary means of obtaining credit break down, the disruption to
households’ and businesses’ spending can be severe.
Thus, the ongoing crisis in the U.S. financial system has significantly depressed economic activity during the past year and a half, and it poses a serious threat to the nation’s ability to quickly return to a path of solid economic growth. Losses on mortgages, on assets backed by mortgages, and on other loans to consumers and businesses, together with an associated pullback from risk taking in many credit markets,
have raised the cost and reduced the availability of credit for borrowers whose credit ratings are less than the very highest. To be sure, among the fundamental causes of the crisis was the provision of too much credit at too low a price as well as insufficient capital. However, the sudden shift to a much higher price for risk taking has led to a significant reduction in wealth and borrowing capacity; it has also forced a number of financial institutions to close and others to be merged with stronger operations. Those forces, in turn, are weighing heavily on consumption, the demand for housing, and businesses’ investment.
Source: Olga Kaganova, Urban Institute, April 2008
From the abstract:
The area of government property asset management is relatively new in public management. Most public wealth is concentrated in public property, and expenses associated with it constitute a substantial part of public budgets. The chapter ventures into two international “hot topics”: practical enhancement of public financial resources through better management of property asset and curbing corruption in the historically corrupt area of government-owned property. The chapter provides a conceptual and methodological framework for governmental decision-makers and their advisors and ends by formulating and discussing a number of issues that require further professional and public debate.
This chapter is published in Finding the Money: Public Accountability and Service Efficiency through Fiscal Transparency, Gabor Peteri (Editor), Open Society Institute (OSI), Budapest, 2008.