Intergovernmental Fiscal Relations in the US Sally Wallace, Dean - - PowerPoint PPT Presentation

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Oct 03, 2022 168 likes •260 views

Intergovernmental Fiscal Relations in the US Sally Wallace, Dean AYSPS and University of Pretoria Scope of government in the US Federal republic 50 States plus the District of Columbia 89,004 local governments 3,031 counties

SLIDE 1

Intergovernmental Fiscal Relations in the US

Sally Wallace, Dean AYSPS and University of Pretoria

SLIDE 2

Scope of government in the US

Federal republic
50 States plus the District of Columbia
89,004 local governments
3,031 counties
19,522 municipalities
16,364 townships
37,203 special districts
12,884 independent school districts
Also--territories

US Census

SLIDE 3

Legal structure

Substantial independence in the system stems from the U.S.

Constitution: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

States, in turn, specify the rules of local government (sub-state)

SLIDE 4

Fiscal Structure

Revenue:
One major restriction for local governments—no tariffs!
States in turn may restrict their local governments
Expenditures:
Governed more by principles of correspondence than statute
Tensions do arise

SLIDE 5

Distribution of public budget

2% 52% 40% 6%

Composition of State Tax Revenue

Property Tax Tot Sales & Gr Rec Tax Individual Income Tax Corp Net Income Tax 48% 9% 35% 2% 6%

Composition of Federal Revenue

Individual Income Corporate Income Social insurance Excise Other 76% 18% 5% 1%

Composition of Local Tax Revenue

Property Tax Tot Sales & Gr Rec Tax Individual Income Tax Corp Net Income Tax

SLIDE 6

IGR to State and Locals

$1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Axis Title

Real Per Capita IGR

SLIDE 7

Expenditures

8% 48% 8% 19% 16% 1% 0%

Composition of State Expenditures

Total Correct-Dir Exp Total Educ-Direct Exp Fin Admin Health & Hosp- Dir Exp Total Highways- Dir Exp Welf-Categ-Cash Assist 3% 64% 6% 14% 7% 1% 5%

Composition of Local Expenditures

Total Correct-Dir Exp Total Educ-Direct Exp Fin Admin Health & Hosp-Dir Exp Total Highways-Dir Exp Welf-Categ-Cash Assist Sewerage-Direct Expend

25% 28% 4% 21% 9% 7% 6%

Composition of Federal Expenditures

Retirement Health Education Defense Welfare Interest Other

SLIDE 8

Issues

Economic development and competition among states and local

governments:

Sales tax rates – border bleeding
Property taxes – exemptions, holidays
Income tax – vast differences (NY vs. TX)
Proliferation of school districts
Increase in cityhood incorporations

SLIDE 9

Data

US Census: https://www.census.gov/data.html
Urban-Brookings Tax Policy Center State and Local Finance Query

data base: https://slfdqs.taxpolicycenter.org/index.cfm

Swallace@gsu.edu