The Economics of State and Local Government

The Economics of State and Local Government

The Economics of State and Local Government

The Economics of State and Local Government

Synopsis

This text draws on research in economics, political science, and policy analysis to show why state and local public finance has assumed such an important role in domestic fiscal policy matters. Traditional topics such as the theories of taxation and intergovernmental grants are combined by Raimondo with numerous overlooked subjects to reveal the dynamic and complex nature of state-local government fiscal behavior. Among the topics discussed are regional economic performance and state-local government finance; state and local taxes on property, sales, and personal income; user charges and gambling revenues; and the beneficiaries of local governments.

Excerpt

In the United States, the sheer number of state and local governments makes them difficult to ignore. While there is one national government, there are fifty state governments and tens of thousands of local governments. Local governments serve counties, municipalities, townships, school districts, and special districts. Almost every one of us -- voters, lobbyists, the mass media, politicians, and economists -- pay attention to the news out of the nation's capital. After all, parents tell their children to grow up to be president, not governor, county executive, or mayor. While most of the attention is focused on the federal government, state and local governments deserve some also.

The federal government is suffering from policy paralysis trying to reconcile a reluctance to increase taxes, deficits, and the tension between the Democrat Congress and the Republican presidency. State and local governments, in turn, are generally collecting taxes and providing education, protecting the environment, caring for aids patients, financing affordable housing, and putting police and firefighters on the street.

Voters have generally shown high regard for state and local governments in part because they have some control over their policy decisions. That control comes about because state and local governments are close to the people. (Of course, sometimes familiarity breeds contempt.) They are responsive to changing public concerns, flexible enough to adjust their priorities, and occasionally innovative in managing their programs. These features have earned state and local . . .

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