Rules versus home rule local government responses to negative revenue shocks Daniel Shoag, Cody Tuttle and Stan Veuger
By: Shoag, Daniel
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Contributor(s): Tuttle, Cody | Veuger, Stan.
Material type: 
ArticlePublisher: 2019Subject(s): TRIBUTOS LOCALES | INGRESOS FISCALES | RECAUDACION | REDUCCION | AUTONOMIA TRIBUTARIA | POLITICA FISCAL | ESTADOS UNIDOS | ANÁLISIS DE REGRESIÓN
In:
National Tax Journal v. 72, n. 3, September 2019, p. 543-574Summary: Local governments rely heavily on sales tax revenue. We use national bankruptcies of big-box retail chains to study sudden plausibly exogenous decreases in this type of revenue. Treated localities respond by reducing spending on law enforcement and administrative services. We further study how cities with different degrees of autonomy vary in their response. Cities in home rule states, who have greater autonomy, react more swiftly by raising other types of revenue. A regression discontinuity analysis of cities in Illinois, where home rule status is triggered by crossing a population threshold, shows that this effect of local autonomy is causal: home rule leads to smaller revenue drops and stronger bond ratings.
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| OP 233/2019/3 National Tax Journal | OP 233/2019/3-1 Deterring property tax delinquency in Philadelphia | OP 233/2019/3-2 The effects of required minimun distribution rules on withdrawals from traditional IRAs | OP 233/2019/3-3 Rules versus home rule | OP 233/2019/3-4 Firm take-up of a corporate income tax cut | OP 233/2019/3-5 Tariff incidence | OP 233/2019/3-6 Earned income tax credits and infant health |
Resumen.
Bibliografía.
Local governments rely heavily on sales tax revenue. We use national bankruptcies of big-box retail chains to study sudden plausibly exogenous decreases in this type of revenue. Treated localities respond by reducing spending on law enforcement and administrative services. We further study how cities with different degrees of autonomy vary in their response. Cities in home rule states, who have greater autonomy, react more swiftly by raising other types of revenue. A regression discontinuity analysis of cities in Illinois, where home rule status is triggered by crossing a population threshold, shows that this effect of local autonomy is causal: home rule leads to smaller revenue drops and stronger bond ratings.
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