Work in progress:
“State LOST Laws: A Comprehensive Analysis of the Laws Governing Local Option Sales Taxes”
Abstract: Local option sales taxes (LOSTs) have received growing attention over the past decade, but a fundamental aspect of LOSTs has remained largely unexplored: How do state laws governing LOSTs differ from one another? The literature largely acknowledges that state laws vary widely, but leaves the discussion at that. This research seeks to fill that void by presenting a comprehensive set of state LOST laws and creating a resource that will enable researchers to consider these differences in their analyses. This research presents state LOST laws framed within the lenses of jurisdictional eligibility and discretionary authority.
“Revenue Portfolio Diversification: Does Reliance on a Broader Base of Revenue Instruments Lead to Increased Stability?”
Abstract: As local governments become increasingly dependent on non-property tax sources of revenue there has been a growing discussion on how that shift will affect the predictability of their overall revenues. This analysis examines both counties and municipalities in the state of North Carolina to test whether a more diverse portfolio has an effect on volatility using the Herfindahl-Hirschman index for diversification. The benefit of examining both counties and municipalities in a single state is that they are experiencing the same economic downturns and they share property tax and sales tax bases. However, municipalities are less dependent on both property taxes and local sales taxes and have a broader range of revenue instruments than their county counterparts. The complete population of counties and municipalities are examined, as well as a subset of municipalities with populations over 5,000 and then 10,000. The period of analysis is 2010 to 2015 with the financial data being pulled from AFIRs. A fixed effects model is employed and the municipal data is clustered by county.
Sample of Completed Projects:
“Time to Adoption of Local Option Sales Taxes: An Examination of Texas Municipalities” Forthcoming. Public Finance Review.
Abstract: This study examines the time to adoption of municipal local option sales taxes (LOSTs) in Texas from 1967 to 2012. General purpose LOSTs were introduced in 1968 and were the only LOSTs available to local governments until 1988, when four earmarked LOSTs were permitted for municipalities. Counties and special districts were also allowed to adopt LOSTs beginning in 1988. Using a Cox Proportional Hazard model and a variation that allows for repeating events, this study finds that proximity to major highways and state and national borders and LOST rates within and around a municipality affect time to adoption.
“The Effect of Connecticut’s Income Tax Adoption on Migration” Forthcoming. Journal of Public Policy.
Abstract: State level income tax policy is a hotly debated topic in both the academic and political spheres. While economic theory and some empirical analyses suggest that larger income tax burdens affect migration decisions, there also is a good deal of empirical evidence showing that tax policy has little to no effect. This lack of consensus in the academic literature is echoed in the political world, where many states are debating whether to eliminate their income taxes or reduce their rates as a means of spurring economic growth. However, difficulties in isolating the motivations for migration create problems of evidence in both spheres. Connecticut’s adoption of an income tax in 1991 thus provides a unique opportunity to analyze the impact of a sizable income tax policy change on migration. The results suggest that Connecticut’s income tax deterred movement into and out of the state, with a net loss in migration.
“Citizens Engaging Government: The Case of Participatory Budgeting in Greensboro” Forthcoming. Public Administration Quarterly.
Abstract: Local governments are responding to growing pressures to increase transparency and citizen engagement, particularly in light of the fiscal stress created by the Great Recession. Historically, the budget process has been a target for these efforts, generally through public hearings and requirements for publicly available budget documents. However, there is growing interest in moving past information sharing to more dynamic and interactive engagement. A review of citizen engagement literature reveals the diverse ways in which local governments and citizens engage with each other. It also reveals that most studies are presented primarily from the perspective of the local government. This article responds by presenting a case study on Greensboro, North Carolina, where a citizen-led effort successfully introduced participatory budgeting (PB). In October 2014, Greensboro passed a resolution in which it committed $500,000 annually to PB, allowing citizens to develop and vote on budget proposals. The research presented here is a first step toward understanding efforts to increase transparency and engagement from a citizen perspective, and it highlights some of the unique challenges that citizens face when they take on such an initiative. This type of innovation has not been widely discussed in the literature.
“The Equity of Local Sales Tax Distributions in Urban, Suburban, Rural, and Tourism-Rich Counties in North Carolina.” 2015. Public Finance Review doi:10.1177/1091142115588976. (Article)
Abstract: The use of local options sales taxes (LOSTs) is creating largely unexplored equity concerns with regard to the revenue raising capabilities of different local governments. This article focuses on differences among urban, suburban, and rural counties; the impact of proximity to urban (or retail) centers; and the impact of LOST decisions on tourism rich counties, a new category of local governments. Using data from 2003 to 2009 on all 100 North Carolina counties and a spatial Durbin error panel model, I identify factors relating to LOST revenue raising capacity. The results indicate that tourism rich counties have the greatest LOST capacity, suburban counties have the least, and there is a penalty for bordering an urban county. However, statistically significant differences in the revenue raising capacity of the four types of counties disappear once property taxes are included in the mix.
“Leviathan or Flypaper: Earmarked Local Sales Taxes for Transportation.” 2015. Public Budgeting & Finance 35(3): 1-23. (Article)
Abstract: Analyses of the relationships of earmarked finances on their respective programs and total expenditures have produced conflicting views of how governments spend earmarked revenue. Some show that earmarks are used in addition to existing finances to increase the total level of funding for recipient programs while others show that earmarks are fungible and program spending is unchanged. An analysis on local option sales taxes earmarked for transportation (LOST-Ts) suggests that transportation spending is increased by more than LOST-T revenue. For every dollar generated by LOST-Ts, transportation spending increases by an estimated $1.76 and nontransportation spending decreases by an estimated $0.73.
“State Income Taxes and Military Service Members’ Legal Residency Choices” 2015. Contemporary Economic Policy 33(2): 334-350. (Article)
Abstract: Using military residency data from 1998 to 2005 across all fifty states, I ﬁnd that income taxes deter legal residencies and that the effect grows as income increases. My results indicate that states with no income tax or with exemptions for military wages experience 100 percent and 39 percent more service member residencies, respectively, than states with an income tax. The influence of state tax policy increases with higher pay and tenure. My findings are in keeping with economic theory, which suggests that high income workers will migrate out of high tax areas and be replaced by low income workers.
“Fiscal Illusion in State and Local Finances: A Hindrance to Transparency” 2014. State and Local Government Review 46(3): 219-228. (Article)
Abstract: There is increasing pressure on state and local governments to be transparent. The ultimate goal of increased transparency is to improve the accountability and the efficiency of government through greater citizen awareness. However, despite the abundance of data now available at the click of a button, citizens are still distrustful and dissatisfied with government policies. Fiscal illusion may be at the root of the disconnect. Fiscal illusion suggests that the citizens systematically misperceive their tax burdens and subsequently the cost of government. These issues are discussed with an emphasis on the relationship between fiscal illusion and transparency in this essay.
“Local Sales Taxes as a Means of Increasing Revenues and Reducing Property Tax Burdens: An Analysis Using Propensity Score Matching.” 2014. Public Budgeting & Finance 34(2):24-43. (Article)
Abstract: In keeping with previous literature, local option sales taxes (LOSTs) are shown to reduce property tax burdens as well as increase own source revenue, although the magnitude is larger than previously estimated. This article advances the literature by using more sophisticated econometric techniques to minimize self-selection bias concerns. It also addresses some of the lingering questions from previous studies. Using county data from 35 states over the time period of 1983 to 2004, counties with LOSTs are matched to counties that have the same estimated propensity to adopt a LOST but are precluded by their states from doing so.