The U.S. and Local Economy: Stats to Know

This presentation features: Conflicting News & Opinion; Where is the Economy Now and Where is it Going?; Characteristics of a Good Economic Indicator; Survey Indicators; Single Indicators; Composite Indicators; Aruoba-Diebold-Scotti Business Conditions Index; ISM Purchasing Managers’ Index; Conference Board Index; Chicago Fed National Activity Index; State Coincident Indices; So…Where Are We?; And Where Are We Going

Local Government Revenue Structure: Trends and Challenges

This paper examines trends in local government revenues and current challenges that local governments face in raising revenue. We also look into the future in an effort to make recommendations to local governments regarding their revenue structure. Important trends that we document include a long-term decline in the property tax and an increase in both state aid and user charges. Recent economic changes present serious challenges for local governments due to volatility of sales taxes, decreases in property values, and threats to state aid. As local governments shape their revenue structure, they will need to respond to external economic, technological and demographic changes. Only user charges offer hopeful prospects as a productive revenue source

Behavioral Public Finance and Budgeting: New Approaches to Old Questions?

(First paragraph) The growing interest in the use of behavioral insights in the study of public administration and policy is contributing to the emergence of behavioral public administration (James et al., 2017). This subfield focuses on the “analysis of public administration from the micro-level perspective of individual behavior” (Grimmelikhuijsen et al., 2017, p. 45). For some scholars, this approach offers interesting opportunities to further the study of perceptions, attitudes, and behaviors of citizens, public sector staff, or public managers (Tummers, et al., 2016). The combination of behavioral theory and experimental approaches can improve the standing of the field of public administration as a design science which informs policy and practice (James, Jilke and Van Ryzin, 2017)

What Policymakers Should Know About the Fiscal Impact of COVID-19 on Illinois

We model the fiscal impacts of the COVID-19 pandemic and stay at home orders on Illinois’ fiscal situation. Prominent forecasters’ recently published estimates range from short and modest declines in U.S. GDP to declines of almost 6%. We model the impact of these economic disruptions on the revenues of the individual income, corporate income, and sales taxes considering what we know about the past history of the revenue sources. We estimate revenue losses from $6.4 billion in the severe pandemic scenario to$1.9 billion in the low severity scenario. We also expect large increases in public health expenditures but a modest impact on Illinois’ fiscal situation since these expenditures are a small portion of the budget. Over the next several years, annual Medicaid expenditures could increase by $4 to$5 billion (21% to 26%). We expect increases in expenditures on human services as economic pressures require residents impacted by the pandemic to rely on these services. Potential declines in the value of public pension funds’ assets could result in increased unfunded liabilities and required state contributions. However, these increased contributions would be phased in gradually due to “asset smoothing,” and immediate fiscal effects would be modest. Local governments with a sales tax are likely to see immediate revenue shortfalls resulting from the sharp COVID-19 related economic downturn. Economic disruption may result in decreased property tax collections, but these impacts would lag significantly. To date, federal responses have been significant but are unlikely to fully insulate Illinois from the fiscal damage.Ope

Regulation of expression of the rat orthologue of mouse double minute 2 (MDM2) by H2O2-induced oxidative stress in neonatal rat cardiac myocytes.

The Mdm2 ubiquitin ligase is an important regulator of p53 abundance and p53-dependent apoptosis. Mdm2 expression is frequently regulated by a p53 Mdm2 autoregulatory loop whereby p53 stimulates Mdm2 expression and hence its own degradation. Although extensively studied in cell lines, relatively little is known about Mdm2 expression in heart where oxidative stress (exacerbated during ischemia-reperfusion) is an important pro-apoptotic stimulus. We demonstrate that Mdm2 transcript and protein expression are induced by oxidative stress (0.2 mm H(2)O(2)) in neonatal rat cardiac myocytes. In other cells, constitutive Mdm2 expression is regulated by the P1 promoter (5' to exon 1), with inducible expression regulated by the P2 promoter (in intron 1). In myocytes, H(2)O(2) increased Mdm2 expression from the P2 promoter, which contains two p53-response elements (REs), one AP-1 RE, and two Ets REs. H(2)O(2) did not detectably increase expression of p53 mRNA or protein but did increase expression of several AP-1 transcription factors. H(2)O(2) increased binding of AP-1 proteins (c-Jun, JunB, JunD, c-Fos, FosB, and Fra-1) to an Mdm2 AP-1 oligodeoxynucleotide probe, and chromatin immunoprecipitation assays showed it increased binding of c-Jun or JunB to the P2 AP-1 RE. Finally, antisense oligonucleotide-mediated reduction of H(2)O(2)-induced Mdm2 expression increased caspase 3 activation. Thus, increased Mdm2 expression is associated with transactivation at the P2 AP-1 RE (rather than the p53 or Ets REs), and Mdm2 induction potentially represents a cardioprotective response to oxidative stress

Data Indicate COVID-19 Impact on State Revenue Not as Severe as Feared

We examine Illinois state revenue impacts to date from the COVID-19 pandemic and associated mitigation measures. Unlike other estimates, which have been model based and prospective, we retrospectively model revenue receipts throughout the early months of the pandemic. Using an interrupted-time-series model within an event-study framework, we find significant negative revenue impacts in the early months of the crisis, followed by neutral and even positive revenue impacts in the later months. Overall, the state lost just over $2 billion in revenues in April and May. The main part of the revenue effects during this period was due to losses in state individual income taxes caused by the delayed tax filing deadline, although sales taxes and corporate income tax losses were seen. Then, starting in July, as virus cases abated and large parts of the economy reopened, the state recovered$1.2 billion in revenue. Much of that came from the new tax filing deadline in July, but some appears to be generated by increased economic activity during that time. Overall, the state’s estimated revenue loss of $800 billion is much smaller than was modeled earlier in the pandemic, and smaller than the discussion in the media and political circles was portraying. In the conclusion of the paper, we discuss risks to future state revenues and implications of our findings for state fiscal policy moving forward

Was Illinois Debt Disproportionately Penalized by the Market During the COVID-19 Pandemic?

There was much uncertainty and concern during the early days of the pandemic about the finances of state and local governments. Lower-rated bond issuers, like the state of Illinois and some other state and local governments, tend to suffer more from interest rate increases during uncertain times. The authors use a set of publicly available data and find that Illinois bond issuers paid a relatively higher price for their bond issues due to its perceived precarious fiscal position entering the COVID-19-induced economic downturn. </p