Group Explores Future of Municipal Finance

By Stern, Emily; Barnes, Bill | Nation's Cities Weekly, March 27, 2000 | Go to article overview

Group Explores Future of Municipal Finance


Stern, Emily, Barnes, Bill, Nation's Cities Weekly


"It's not just ecommerce that is challenging municipal finance structures--it's `e-life,'" observed Nancy Nathanson, council member from Eugene, Ore., at a recent meeting of Municipalities in Transition Project participants during NLC's Congressional City Conference.

The new economy and advances in technology are "creating unprecedented opportunities for `virtual existence' that have direct implications for municipal income, property, and sales tax systems."

The meeting kicked off the group's new initiative on the "Future of Municipal Finance." The project will look at how a broad array of developments--changes in the economy, shifts in population, and the reshaping of the regulatory landscape for cities--are impacting municipal finance systems.

In the coming months the group will explore issues such as:

* The potential loss of sales tax revenue if municipalities are prohibited from collecting taxes on sales over the Internet.

* The "slippage" of the growing information and services part of the economy out from under the net of the municipal tax system.

* The effects of federal and state preemptions and mandates on city finances.

The Municipalities in Transition group will hold its next meeting on the municipal finance topic on June 26 and 27th in Washington, D.C. At this meeting, participants will develop recommendations to present to NLC's Board of Directors regarding an "action plan" for the organization toward helping cities address needs in this area.

At the CCC meeting, participants decided to start with a core set of principles when assessing the merits and deficiencies of municipal finance systems. Principles might include values such as sustainability, equity and fairness, stability, and long-term investment.

Once armed with a set of principles, participants said that they could then use this framework to evaluate trends and developments that are affecting municipal finance systems and develop appropriate responses that NLC might undertake. …

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