Academic journal article Public Administration Quarterly

Property Tax Limits and Fiscal Burdens: The Role of Organizational Structure

Academic journal article Public Administration Quarterly

Property Tax Limits and Fiscal Burdens: The Role of Organizational Structure

Article excerpt


The fiscal crisis facing governments throughout the U.S. has put a premium on fiscal flexibility. The federal government generally has the greatest flexibility as it has unlimited borrowing authority and the ability to run annual deficits. County governments, on the other hand, are at the "... bottom of the fiscal food chain" (Pagano and Johnston, 2000, p159). The difficulties in which county governments operate has been well documented (e.g., Menzel and Thomas, 1996) and stems largely from their lack of home-rule powers, service provision mixes which have historically been dominated by state mandated services (health and human services, road maintenance, public safety and courts and public records systems) and, in many states, state-imposed tax and expenditure limits (TELs).

A good deal of research has been conducted on the impact of TELs on municipal and state government decision-making (Abrams, 1986; Bails, 1990; Joyce and Mullins, 1991; Lowery, 1983; Mullins and Joyce, 1996; Lowery, 1983; Mullins, 2004; Mullins and. Wallin 2004; Shadbegian, 1999; Skidmore, 1997). Unfortunately, very little research has been conducted on county-level responses to TELs. In one of the few that included counties, Springer et. al. (2009) found that Kansas county officials increased property taxes, own source revenues and expenditures under a stricter version of TEL at higher rates than they did after the TEL was made much less stringent. The authors speculate that, "local officials, fearing potential shortfalls, automatically levied to the near maximum allowable amount... freed of limitations, local officials knew they had the flexibility to tax what was needed..." (67).

While our understanding of county-level responses to TELs is limited, we do know quite a bit about county governance structure. A host of research is available that examines explanations for changes in county organizational or administrative structure and the effects of those changes (Advisory Commission on Intergovernmental Relations, 1988, 1991; DeSantis and Renner, 1993; Menzel and Thomas, 1996; Morgan and Kickham, 1999; Sokolow, 1993; MacManus, 1996; Marando and Reeves, 1993; Martin and Nyhan, 1994; Salant and Martin, 1993; Wiseman, Giles and McCormick, 1994; Mead, 1994; Lyons and Scheb, 1998; Leland and Thurmaier, 2000; Feiock and Carr, 2000; Carr and Feiock, 2002; Benson 2003a). Of particular interest has been the conversion to "reformed" or "progressive" forms of organizational structure, typically defined as elected executive or appointed administrator (Benton, 2002, 2003a; DeSantis and Renner, 1996; Cigler, 1995). These works, of course, stem from empirical studies of municipal governance structure effects dating back to the 1960s (e.g., Lineberry and Fowler, 1967). While the research on the effects of government structure on policy outcomes is extensive, much less has been done in the area of fiscal policy with the exception of some of the most recent work by Benton (2002, 2003b) and some of the earlier work of DeSantis and Renner (1996), Schneider and Park (1989) and Park (1996).

This is important because of the nagging question of what responsiveness means in terms of structural effects. The progressives argued for non-partisan elections and professional administration as a means of minimizing the effects of party machines and enhancing local government's responsiveness to its citizens (Lineberry and Fowler, 1967). If we assume that state adoption of TELs is a political response to constituent concerns over high taxes, we should expect to see reformed county governments more responsive to those concerns.

The shift to progressive forms of local government lies on two central pillars; the removal of party machine politics and the introduction of administrative professionalism. Here the goal is to improve the efficiency of producing services while reducing tax burdens. The shift has occurred, however, in many states where local governments are subject to artificial tax and expenditure limits. …

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