State and Local Fiscal Policy
Show Less

State and Local Fiscal Policy

Thinking Outside the Box?

Edited by Sally Wallace

In this broad and illuminating work, experts on public finance discuss innovations in state and local tax policy that have been implemented or considered over the course of the last three decades. The authors provide original work that analyzes whether state and local governments have ‘gone outside the box’ to deal with the strains of current public finances or have gotten along by adhering to the status quo. This book provides researchers, students and policy makers with evaluations and analyses by well-known scholars in the area of state and local public finance of actual practices and analysis of potential policy changes for the future.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 3: Genesis of State–Local Creativity

Robert Tannenwald, Jennifer Weiner and Igor Popov


Robert Tannenwald, Jennifer Weiner and Igor Popov1 INTRODUCTION The premise of this chapter is that state and local governments in the USA have been forced to become more creative in raising revenue in recent years. Actually, states have exhibited creativity in raising revenues when confronting past challenges. In each recession, and with each wave of increased responsibility, states have come up with all sorts of clever ways to boost receipts. The Great Depression spawned state sales taxes. The property tax revolt of the late 1970s and early 1980s induced greater reliance on user fees and charges. The severe contraction in state revenues in the early 1990s inspired creative ‘Medicaid arrangements’ – a euphemism for clever exploitation of loopholes in federal regulations to divert money intended for health care into state general funds. Nevertheless, some ‘bread and butter’ options, such as surcharges and increases in statutory tax rates, have been enacted less frequently during the 1990s and 2000s than they were in the 1970s and 1980s. Indeed, the 1990s were marked by a proclivity for tax cuts, a few years of discipline on the spending side, and increased federal aid (relative to very depressed levels in the 1980s), leading to a build-up of reserves. States have been drawing down these reserves since the mid-2000s to help make ends meet. Furthermore, interest has intensified in forms of taxation not as widely or seriously considered in the past. Gross receipts taxes and value added taxes are perhaps the most prominent cases in point. ‘Loophole...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.