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  1. State and Local Fiscal Policy and Economic Growth and Development, Working Paper 026 [Download]

    Title: State and Local Fiscal Policy and Economic Growth and Development, Working Paper 026
    Author: Bell, Michael
    Description: The purpose of this report is to address three fundamental questions: 1. What factors determine and drive local economic growth and development? 2. How do state and local tax and expenditure policies influence economic growth and development? 3. Is there a balanced system of taxation that supports economic growth and development while not unduly burdening any particular industry or segment of the economy? We approach the project with a clear recognition that the primary engine for strong state and local economies is a strong private sector. The purpose of this report is to identify those state and local fiscal policies that facilitate and support growth in the private sector. Such state and local policies fall into two general categories: 1. traditional economic development policies primarily targeted at external sources of growth through attracting new firms or firm relocations; and 2. policies which recognize that the engine for economic growth is typically the small firm and, therefore, focus on promoting internal growth by supporting entrepreneurship and creating an environment conducive to private economic activity. To address these issues, the report is broken into six sections following this introductory section. The next section discusses what is meant by local economic growth and development. That is followed by a section, which lays out the general theoretical framework for thinking about local economic growth and development. This section is followed by a general discussion of why some metropolitan areas grow and some do not. The next section discusses the literature on which factors affect firm location and economic growth. That is followed by a discussion of the specific impact of state and local fiscal policies on local economic growth and development. The final section then discusses the notion of a balanced tax system, which promotes local economic growth and development, but does not unduly burden any individual sector of the economy.
    Keywords: Public policy
    Date Uploaded: 10/15/2015
  2. Does the Community Reinvestment Act Help Minorities Access Traditionally Inaccessible Neighborhoods?, Working Paper 014 [Download]

    Title: Does the Community Reinvestment Act Help Minorities Access Traditionally Inaccessible Neighborhoods?, Working Paper 014
    Author: Friedman, Samantha
    Description: Recent research has established that the Community Reinvestment Act (CRA) has increased mortgage lending in low-income and minority communities. This study examines the extent to which the CRA has helped racial minorities purchase homes in predominantly white neighborhoods from which they have traditionally been excluded. Using 2000 Home Mortgage Disclosure Act reports (HMDA) and 2000 decennial census data, we find that in metropolitan areas where a relatively high proportion of loans are made by institutions covered by the CRA, blacks and Latinos are more likely to purchase homes in predominantly white neighborhoods than in areas where relatively fewer loans are made by such lenders. This finding holds after controlling for a range of socioeconomic characteristics. The paper concludes with policy recommendations for revising the CRA and its enforcement mechanisms.
    Keywords: Public policy
    Date Uploaded: 10/15/2015
  3. All Centers Are Not Equal: An Exploration of the Polycentric Metropolis, Working Paper 015 [Download]

    Title: All Centers Are Not Equal: An Exploration of the Polycentric Metropolis, Working Paper 015
    Author: Sarzynski, Andrea
    Description: There is now widespread recognition among urban researchers that a fundamental shift is underway in the internal structure of American urban areas. Polycentrism is increasingly supplanting monocentrism as the dominant urban form. However, the extent to which this has occurred and the implications of this change in urban form, while widely noted and discussed, have, surprisingly, not been the subject of a large body of carefully conducted and generalizable empirical research. We explore the extent of polycentrism for a sample of fifty U.S. metro areas, using an absolute threshold definition for identifying employment centers. We situate our results within the broader literature on subcenters, and compare our results to previous research on polycentrism. Using cluster analysis, we identify broad types of metros according to the incidence and patterning of centers within our sample. Variables of interest include the number of centers, the relative concentration of jobs within centers, the relative dominance of the core center, and the concentration of employment in major and minor centers. We also explore relationships between types of polycentrism and various metro attributes, such as population size, city age, geographic region, municipal fragmentation, and economic function. Finally, we set out a detailed agenda for future research.
    Keywords: Public policy
    Date Uploaded: 10/15/2015
  4. Testing the Conventional Wisdom about Land Use and Traffic Congestion: The More We Sprawl, the Less We Move?, Working Paper 13 [Download]

    Title: Testing the Conventional Wisdom about Land Use and Traffic Congestion: The More We Sprawl, the Less We Move?, Working Paper 13
    Description: We explore relationships between seven dimensions of land use in 1990 and subsequent levels of three traffic congestion outcomes in 2000 for a sample of 50 large U.S. urban areas. Multiple regression models are developed to address several methodological concerns, including reverse causation and time lags. Controlling for prior levels of congestion and changes in an urban area’s transportation network and relevant demographics, we find that: housing-job proximity is inversely related to commute time; density/continuity is positively related to roadway ADT/lane and delay per capita; and housing centrality is positively related to delay per capita. Expect for proximity, the results suggest that congestion is not directly related to land use patterns as claimed by conventional wisdom.
    Keywords: Public Policy
    Date Uploaded: 09/28/2015
  5. Thin the Soup or Shorten the Line: Washington Area Nonprofits Adapt to Uncertain Times, Working Paper 006 [Download]

    Title: Thin the Soup or Shorten the Line: Washington Area Nonprofits Adapt to Uncertain Times, Working Paper 006
    Author: Atkins, Patricia
    Description: Human services nonprofit organizations are crucial partners to government and the private sector in developing and maintaining healthy communities and families. They are able to leverage multiple funding streams to create a greater capacity to deliver services than any single funding source could achieve on its own. Because they often have strong relationships with the people and neighborhoods where they work, nonprofits are well-positioned to meet community needs. However, in the current economic climate, Washington-area human services nonprofits are being squeezed by rising demand, escalating costs, and increasing administrative tasks, all accompanied by only sluggish revenue growth. An analysis using survey results, tax documents, interviews, and local government budget data finds that these organizations have coped with fiscal stress in a variety of ways—many of which could lead to significant erosion in the quality and quantity of services provided to the community. There are models, though, to bolster nonprofits which should be considered by regional philanthropic organizations and government alike. But overall, the public and private sectors need to work with the nonprofit sector to jointly develop solutions that will meet the needs of community residents without overly burdening the resources of any one sector.
    Keywords: Public policy
    Date Uploaded: 09/28/2015
  6. THE HIGH PERFORMANCE BONUS, working paper 007 [Download]

    Title: THE HIGH PERFORMANCE BONUS, working paper 007
    Author: Wiseman, Michael
    Description: The Personal Responsibility and Work Opportunity Act of 1996 authorized payment of a bonus to states with exceptional Temporary Assistance for Needy Families (TANF) programs based on a formula to be established by the Department of Health and Human Services. The resulting High Performance Bonus (HPB) awards have been made for federal fiscal years 1998-2003. This paper reviews the development of the HPB program, explores the underlying data related to employment, identifies certain conceptual, statistical, and administrative problems, and suggests possible improvements. The reliability of HPB data as a source of information on state TANF programs has improved over time, principally as the result of shift of responsibility for performance assessment to the federal government and to use of information from the National Directory of New Hires. The data reveal significant differences across states in patterns of TANF receipt that should be the object of study both as consequences of differences in client populations and specific state program content. Nevertheless, the HPB measures and the NDNH data have quirks that deserve more attention, and efforts must be made to speed the delivery of the outcomes information generated by the HPB system to state TANF program managers and policymakers. The 2001 expansion of HPB performance measures beyond employment outcomes is of doubtful utility and should be reconsidered.
    Keywords: Public policy
    Date Uploaded: 09/28/2015

    Author: Furdell, Kimberly
    Description: Cities are creatures of their state governments. As such, state policy can have important effects, intended or otherwise, on the well-being of cities and their residents. States affect cities in a variety of ways, and the importance to local governments of the state government role has long been recognized. States determine the institutional forms of their local governments, the land use and regulatory frameworks under which they operate, and the revenue systems they may use. Cities and their residents are directly affected by state tax policies and by state programs and policies. While some states have explicit “urban policies” directed at promoting the wellbeing of their cities, in every state cities are affected, adversely or beneficially, by a range of state activities not necessarily devised with cities and their residents in mind. This paper describes the initial stages in a research project that attempts to tease out how state policy effects the performance of cities. We first use factor analysis to explore the performance of central cities between 1990 and 2000 by measuring changes in a set of measures meant to broadly capture the economic and social well-being of city residents. We then employ linear regression to predict cities’ factor scores using a set of non-policy variables that describe the demographic characteristics and economic structures of the cities. By explaining performance using non-policy variables in this way, we attempt to isolate the potential impact of policy on performance, which should be captured in the unexplained variation in the cities’ factor scores. In the final part of our statistical analysis, we estimate how much of the unexplained variation can be attributed to state-level factors by using state fixed-effects models to predict the residuals from the previous stage regressions. The next stage in our research will be to use the state-fixed effects models as guides in choosing states for case study research. We will conduct a series of intensive case studies in both well- and poorly-performing states in order to determine how and why state-level policy affects the well-being of cities within those states.
    Keywords: Public policy
    Date Uploaded: 09/28/2015

    Author: Bell, Michael E.
    Description: The Government of Sudan and the Sudanese People’s Liberation Movement have agreed to a framework for ending Africa’s longest running civil war. As part of that agreement, there is a need to revise the intergovernmental grant system in Sudan. This paper describes the current intergovernmental grant system, concluding that it is only marginally redistributive. After discussing a general framework for designing intergovernmental grants systems, the results of alternative grant simulations are presented. Under virtually all of the simulations poorer states receive larger grants than under the current system. The final section of the paper identifies and discusses issues that must be addressed to successfully implement any intergovernmental changes. These issues include, for example, the need to strengthen local revenue mobilization and improve local revenue administration.
    Keywords: Public policy
    Date Uploaded: 09/28/2015
  9. Community Building and a Human-Capital Agenda in Hampton, Virginia: A Case Analysis of the Policy Process in a Medium-Size City, working paper 012 [Download]

    Title: Community Building and a Human-Capital Agenda in Hampton, Virginia: A Case Analysis of the Policy Process in a Medium-Size City, working paper 012
    Author: Stone, Clarence
    Description: Cities, particularly older and land-locked cities like Hampton, Virginia, face intense economic pressure. Their responses, however, are not structurally determined, but involve a significant role for political agency in setting and pursuing an agenda. This case study of Hampton traces how key players saw the problems they faced, the responses they made, and the bundle of skills, strategies, and resources they brought together in responding. Working through city government and a nonprofit concerned with youth development, a group of talented professionals devised a revitalization agenda around the ideas of community building and human-capital development. By devising a process that aligned community resources with city and nonprofit programs, they linked their efforts in mutually reinforcing ways that could be sustained. Thus they created an institutional legacy that could endure even as new issues and new players came on the stage.
    Keywords: Public policy
    Date Uploaded: 09/28/2015
  10. State and Local Fiscal Trends and Future Threats, Working Paper 025 [Download]

    Title: State and Local Fiscal Trends and Future Threats, Working Paper 025
    Author: Brunori, David
    Description: State and local public finance has never been more important. Economic, political, and technological developments have dramatically changed how state and local governments raise revenue as well as on what they spend that revenue. State and local public finance structures have not changed significantly over the past five decades. Indeed, the basic structure of the tax systems was designed for a different time and a much different economy. The world in which those systems operate has changed considerably. The U.S. economy has moved from a manufacturing base to one dominated by the service sector and intellectual property. The challenge for state and local governments is that neither services nor intellectual property have been part of their tax base. Moreover, the economy in which people primarily bought locally manufactured tangible personal property no longer exists. Businesses no longer produce and sell products in one or a few states, but throughout the nation and the world. Rapid technological advancements have also played a role in reshaping the fiscal landscape. The age of electronic commerce has revolutionized how people work, play, and communicate. Technology has affected all tax systems, but perhaps none greater than the traditional sales tax. Because state and local governments have been unable to impose sales taxes on most electronic commerce, they have lost billions in tax revenue. These loses have put enormous pressure on governments to find alternative sources of revenue or curtail public spending. In the end, the economy in which most of the state and local revenue systems were designed to operate has been replaced with a high technology, global economy where purchasing services or products from India and Italy is only a few keystrokes away. The global economy has produced a new dimension into the use of fiscal policy to foster economic development. State and local governments have long engaged in a competition against each other for business investment and jobs. Over the past quarter century, political leaders have used their tax laws to encourage companies to relocate to (or to refrain from leaving) their state or locality. Such competition has put enormous pressure on state and local governments to keep tax burdens low, while providing the highest possible level and quality of public services. The globalization of the economy has magnified the scope of the competition. State and local governments are no longer competing with each other, but with nations around the world. Another development with which states and local governments must contend is the changing scope of their duties. American subnational governments are providing more public services than ever before, and the need for revenue has never been greater. The states, for example, are not only providing the traditional services (state police, prisons, higher education, and highway maintenance.) They are also providing many services that were once almost exclusively provided and paid for by the federal and local governments. Since the 1980s the federal government has been steadily shifting more and more responsibilities to the states. The states have been asked (or just as often have been forced) to administer and pay for many programs that traditionally have been the responsibility of the federal government. Welfare, Medicare, Medicaid, and highway maintenance are just some examples in which the states have replaced the federal government as the administrative body responsible for providing the services. While the costs of assuming many of these programs have been offset with increased federal funding and protections against unfunded mandates, this phenomenon, commonly called “devolution” in academic circles, has nonetheless contributed to the growth of state, and to a lesser extent, local government budgets. This trend is likely to continue as the federal government, laboring under large deficits, devotes more resources to national defense and homeland security. State and local governments will be asked to do more. At the same time, as the result of political pressure and a flood of legal challenges, state governments have taken on an increasingly greater share of the costs of public education. While elementary and secondary education was traditionally the financial responsibility of local governments, state governments have, over the past decade, paid a decidedly greater percentage of school finance costs. In addition to the financial pressures from shifting responsibilities, state and local governments have experienced what could be called the “politics of anti-taxation.” Since the late 1970s there has been a concerted effort to politicize, even demonize, taxation. This often fervent anti-tax sentiment has festered at all levels of government during the past quarter century. Anti-tax politics fueled the passage of Proposition 13 in California and spurred property tax revolts around the country. Tax cutting became a regular theme for gubernatorial or legislative candidates seeking election in virtually every state. It has also helped spawn the initiative and referendum movement, a process that has traditionally been dominated by anti-tax crusaders. The politics of anti-taxation has limited state and local government ability to raise revenue precisely when the demand for services and education spending has increased. This report provides a detailed description of state an d local fiscal systems and how they operate given the developments discussed above.
    Keywords: Public policy
    Date Uploaded: 09/28/2015