Public Finance Seminar Spring 2015, Professor Yinger Property Tax Incidence.
State and Local Public Finance Spring 2013, Professor Yinger
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Transcript of State and Local Public Finance Spring 2013, Professor Yinger
State and Local Public FinanceSpring 2013, Professor Yinger
Lecture 1
Introduction and Overview
State and Local Public FinanceLecture 1: Introduction and Overview
Class Outline
Course Requirements
The U.S. Federal System
Overview of Course Topics
State and Local Public FinanceLecture 1: Introduction and Overview The Federal System in the U.S.
Broad outlines defined by constitutions Details determined by politics
Units Defined by U.S. Constitution The Federal Government State Governments
Units Defined by State Constitutions The State Government Counties and (usually) Townships Municipalities (Cities and Villages) School Districts Special Districts
State and Local Public FinanceLecture 1: Introduction and Overview County Township Municipality School District
State and Local Public FinanceLecture 1: Introduction and Overview
Sales taxes provide almost half of state tax
revenue
Most of the federal grants
are for TANF or Medicaid
State and Local Public FinanceLecture 1: Introduction and Overview
State and Local Public FinanceLecture 1: Introduction and Overview
State and Local Public FinanceLecture 1: Introduction and Overview
State and Local Public FinanceLecture 1: Introduction and Overview
Special Districts by Function, 2002Function Number Percent
Total 35,356 100.0 Total single function districts 32,157 91.0 Natural resources 7,026 19.9 Fire protection 5,743 16.2 Water supply 3,423 9.7 Housing & community dev't 3,413 9.7 Sewerage 2,020 5.7 Cemeteries 1,670 4.7 Libraries 1,582 4.4 Parks and recreation 1,314 3.7 Highways 767 2.2 Health 743 2.1 Hospitals 735 2.1 Education 530 1.5 Airports 512 1.4 Utilities other than water 485 1.4 Other 2,194 6.2 Multiple function districts 3,199 9.0
State and Local Public FinanceLecture 1: Introduction and Overview
State Examples, 2012
* Also has dependent school districts.
State Total Count Town Muni Schl Specl
Alaska 177 14 0 148 *0 15
California 4,350 57 0 482 *1,025 2,786
Hawaii 21 3 0 1 1(Dp) 17
Illinois 6,968 102 1,431 2,729 905 3,232
Mass. 852 5 298 53 *84 412
Nebraska 2,581 93 419 530 272 1,267
New York 3,454 57 929 617 *679 1,172
Penn. 4,905 66 1,546 1,015 514 1,764
Texas 4,856 254 0 1,214 *1,079 2,309
Virginia 497 95 0 229 *1 172
State and Local Public FinanceLecture 1: Introduction and Overview This course examines spending
and taxation in the U.S. federal system.
Determinants of local spending Evaluating tax policies Fiscal aspects of economic
development Intergovernmental fiscal relations
Many of the principles apply to the federal systems in other countries.
State and Local Public FinanceLecture 1: Introduction and Overview The course covers both positive
and normative analysis.
Positive analysis: Examines the behavior of voters,
businesses, and government officials.
In principle, positive statements can be tested against evidence.
Normative analysis: Examines the best choices for
public officials to make. Combines positive analysis with
values—yours!
State and Local Public FinanceLecture 1: Introduction and Overview Positive Analysis, Examples
(which may or may not be true)
People with higher incomes vote for higher levels of local public services, all else equal.
Communities with higher property tax rates have lower house values, all else equal.
Lowering a city’s property tax rate has little impact on its employment.
School districts with more disadvantaged students have to spend more to achieve any given level of student performance.
State and Local Public FinanceLecture 1: Introduction and Overview
Normative Analysis, Examples (with which you may or may not agree)
Prison provision should be contracted out to private companies.
A property tax is a better way to finance local public services than a local income tax.
Cities should not use property tax exemptions to promote economic development.
States should give more education aid to school districts with a high concentration of at-risk students.
State and Local Public FinanceLecture 1: Introduction and Overview Intellectual Honesty
Separating positive and normative arguments may be the most difficult task in a public policy debate.
Many people start with a favorite program and then cherry-pick the evidence that supports their position.
This approach undermines their own objectives.
You should use the best available evidence to determine which programs best meet your objectives.
State and Local Public FinanceLecture 1: Introduction and Overview Class Conference
At the end of this class, you will present your proposals for reform in state or local public finance; many of them will be more sensible than what is actually being discussed in state legislatures.
After this class, some of you will be able to implement your proposals or develop other ones when your work in state and local governments.
My hope is that your proposals will be at least a little better because you took this class!
State and Local Public FinanceLecture 1: Introduction and Overview Class Conference, Cont.
We are slowly coming out of a recession, and state and local governments are struggling.
Their service needs are up.
Their revenues are down.
They need your help!!!
State and Local Public FinanceLecture 1: Introduction and Overview Class Conference, Cont.
You should have no trouble finding good topics. Recent examples:
"The Costs and Benefits of a Casino in Prince George's County"
"Maryland’s Enterprise Zone Program" "Buying Lottery Tickets Online – A Bet Maryland Should
Not Wager" "Recommendations on Enforcement of U.S. Online
Sales Tax Collection for States" “A Land Bank for Syracuse” "New York City Traffic Development Plan" "Indian Health Care: Increasing Health Services" "Soft Drink Taxes in New York State" "Should New York State Create a Virtual High School?" "Recommendation for the Homestead Tax Option in the
New York State"