Source: Can Chen, Kenneth A. Kriz, Qiushi Wang, Public Finance Review, Published online before print October 19, 2015
From the abstract:
A well-developed and carefully maintained public infrastructure system is of critical importance to ensure that the economy can function effectively. To investigate the consequence of deficient public transportation infrastructure conditions on states’ creditworthiness, this study constructs an infrastructure health index to measure the physical conditions of state highway transportation systems and empirically estimates the effect of the overall health of state highway transportation infrastructure on Moody’s and Standard and Poor’s state credit ratings by using a data set from 1999 to 2009. The empirical results indicate that the poorer the quality of a state’s highway infrastructure, the lower the probability that the state will be in a higher credit rating category, and the higher the probability that the state will be in the medium or low credit rating category. This finding suggests that state policy makers should be cautioned about the negative consequences of cutting spending on infrastructure maintenance and expansion.
Source: Elizabeth McNichol, Center on Budget and Policy Priorities blog, October 20, 2015
States routinely put at risk some of the country’s highest priorities ― educating children, maintaining a healthy and trained work force, and caring for the elderly, for example ― by failing to employ proven budget methods that would help them plan farther into the future. A few improvements would make considerably more information available to policymakers and the public for budget debates, as we explain in a new paper and detail in an interactive map.
Better State Budget Planning Can Help Build Healthier Economies
Source: Elizabeth McNichol, Iris J Lav, Michael Leachman, Center on Budget and Policy Priorities, October 15, 2015
Source: Liz Farmer, Governing, October 2015
Desperate for more money, public pension systems have been making high-risk investments hoping for a higher profit. But they may ultimately cost taxpayers more.
Source: Ellen Seljan, Public Budgeting & Finance, Vol. 35 Issue 3, Fall 2015
From the abstract:
This paper analyzes the interaction effect between fiscal stress and supermajority requirements to raise taxes. I hypothesize that fiscal stress nullifies the effects of supermajority requirements, making states with and without supermajority requirements equally likely to raise taxes during these periods. This conclusion was drawn from a theory on how fiscal stress affects the legislative bargaining environment. The hypothesis was tested using data from 49 states from 1980 to 2010, and the results confirmed expectations. This research contributes to a growing literature that suggests that the effect of institutions cannot be analyzed without considering the context of the political environmen
Source: Jackson Brainerd, National Conference of State Legislatures (NCSL), September 28, 2015
State-operated casinos are taxed to support state services. Below is a listing of states with state-operated casinos and information regarding how much each state taxes and where the money goes.
Source: Robert A. Greer, Public Finance Review, Vol. 43 no. 6, November 2015
From the abstract:
In a complex federalist system, the interactions across levels of government have important fiscal implications. Municipal debt has become increasingly important as local governments turn to tax-backed bonds as a significant source of funds. In a system of local governments that have overlapping borders, fiscal interactions become a factor in issuing debt. In this system, debt acts as a fiscal common resource similar to traditional common-pool resources. Specifically, vertical externalities are created with multiple levels of governments issuing bonds backed by the same tax base. Empirical results show that on average an increase in the total amount of debt issued by subcounty governments increases the true interest cost paid by county governments on tax-backed debt. Furthermore, increasing the number of overlapping governments also increases the interest costs for county debt. These findings show support for analyzing debt capacity as a fiscal common resource and have implications for debt management strategies.
Source: Robert S. McIntyre, Richard Phillips, Phineas Baxandall, U.S. PIRG and Citizens for Tax Justice, 2015
From the summary:
U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their full share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their profits are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.
Source: Meagan M. Jordan, Wenli Yan, Somayeh Hooshmand, The American Review of Public Administration, Early View, Published online before print October 5, 2015
From the abstract:
A negative revenue variance (also known as a revenue shortfall) is generated when the actual inflow of revenue falls short of the budgeted revenue. In an environment constrained by a balanced budget requirement, a negative revenue variance may result in a compensating cut in program expenditures. As such, it is imperative to explore the drivers of negative revenue variance. To answer these questions, we take a look at the states’ revenue mix, specifically, the diversification and elasticity of a state’s revenue structure. We establish a quantitative model to capture factors that affect the occurrence and magnitude of negative revenue variance. Our findings suggest that revenue diversification reduces both the occurrence and the size of a negative revenue variance. Elasticity, on the contrary, increases the occurrence but reduces the magnitude of the negative revenue variance. These findings provide additional evidence for the importance of fiscal planning and design of revenue structure that includes consideration of both diversification and elasticity of the revenue portfolio. Specifically, elasticity and diversification can be used in tandem to address an existing revenue shortfall.
Source: Christine Sgarlata Chung, Widener Law Journal, Vol. 24, 2015
From the abstract:
When a municipality is the debtor, as is the case in chapter 9 municipal bankruptcies, one might assume that the law recognizes community/taxpayer interests at all stages of chapter 9 proceedings. That assumption would be incorrect. Unlike bondholders, public employees (active and retired), and other creditors affected by municipal insolvency, all of whom have a voice in chapter 9 proceedings, a municipal debtor’s residents — taxpayers who pay for and rely upon municipal services — do not have a clear statutory right to participate in a chapter 9 case. In this article, I argue that taxpayers should have a voice at every stage of a chapter 9 proceeding, as taxpayers are directly and profoundly impacted by municipal insolvency and by chapter 9 plans of adjustment. Citing Stockton and Detroit municipal bankruptcy cases, I argue that taxpayers ought to be considered a type of creditor, owed a debt of at least minimally acceptable essential services, and that taxpayers therefore should have a voice alongside other creditors whenever an insolvent municipality seeks chapter 9 relief.
Source: Joseph Nye, Isaac Rowlett, Gordon Sonnenschein, Anika Van Eaton, and Sarah Wissel, George Washington University, April 2015
…This report assesses the national landscape of workforce outcomes vis a vis community colleges by describing different state systems’ approaches to measuring these outcomes and the cases where these outcomes are linked to performance-based funding…..