Thinking Outside the Box?
Studies in Fiscal Federalism and State–local Finance series
Edited by Sally Wallace
Comments on ‘Genesis of state–local creativity’ Jason S. Seligman Robert Tannenwald et al. have presented a chapter here that is about the conditions that foster ‘creativity’, or really innovation – right in line with the spirit of this volume. Tannenwald, Jennifer Weiner and Igor Popov have generated many observations and support them with data which underscore the idea that necessity motivates creativity. By Tannenwald et al.’s account there is ample necessity to drive innovation. Stuck between declines in economic activity, and voter resistance to rate increases, Tannenwald et al. argue that state and local government revenue creativity must be less incremental than in the past. To give an example which may help strengthen the understanding of the Tannenwald et al. thesis, I offer an anecdote from my drive to Atlanta to discuss this paper with its authors. In fact I now believe that the chapter informed my perspective on what at first appeared to be a trivial event. Traffic was moving much slower than usual. (Traffic in Atlanta is usually quite speedy.) No accidents were apparent, or reported ahead on the radio. What was on the radio, though, was informative in its own right. Atlanta Mayor Shirley Franklin was discussing two issues: first, a budgetary shortfall; and second, increases in enforcement of traffic regulations. She tied the recent growth slowdown to the revenue shortfall, and the shortfall to the plan to increase citations. Now this represents a traditional incremental approach to revenue creativity that addresses voter resistance to direct tax...
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