Should Philadelphia's suburbs help their central city?

We end with the age-old debate of city vs. suburbs. The United States is unique in its commitment to local government as the primary provider of essential public services and in its use of local taxes as the primary means for paying for these services. The Philadelphia metropolitan area is typical of the U.S. pattern. But Philadelphia faces the burdens and responsibilities of all older central cities, including a higher proportion of poor residents than its surrounding suburbs. Such circumstances lead the city to impose higher taxes, but raising revenues through higher taxes becomes self-defeating when tax rates drive people and businesses away. The result is a weaker city and regional economy. How can Philadelphia strengthen its finances? In "Should Philadelphia's Suburbs Help Their Central City?" Bob Inman proposes a targeted program of suburban assistance to lower the commuter wage tax and presents evidence that such a program is likely to benefit city and suburban residents alike.Cities and towns ; Philadelphia (Pa.)

Financing Cities

The macro-economic and micro-economic evidences makes a persuasive case for cities as important centers for productive efficiency, innnovation, and economic growth. For cities to achieve their full economic potential, however, complementary public services are required. This paper reviews the arguments and the evidence for the efficient financing and governance of city public services. Against the criterion of efficiency, city services should be limited to those services valued by city residents; financing should assign residential taxes to residential services and business land taxes and fees to business services; and city governance should foster competition and choice.

States in fiscal distress

The 2007-10 recession has imposed significant fiscal hardships on state and local governments. The result has been state budget deficits and the need to increase state taxes, cut spending, and withdraw funds from state “rainy day” accounts. The primary cause of state budget “gaps” has been the rise in the level of state unemployment. There is no evidence that these gaps are related to state political institutions, a state’s prior receipt of federal funding, or possibly favored access to key congressional budget committees. The federal government has responded to these gaps with the passage of the American Recovery and Reinvestment Act (ARRA) of 2009 to aid states in fiscal distress and provide economic stimulus. Though intended as insurance for fiscal distress, ARRA covers at most $0.23 of each dollar of a state’s recession-induced budget gap. These funds are provided through a large per capita payment to each state, independent of any level of state deficit. AARA was also intended as targeted assistance for stimulating local economies, but its funding is uncorrelated with state unemployment rates. ARRA funding appears to be decided by congressional politics, given Congress’s desire to pass a major spending and tax relief package as quickly as possible. States are important “agents” for federal macroeconomic policy, but agents with their own needs and objectives.State finance ; American Recovery and Reinvestment Act of 2009

Federal Assistance and Local Services in the United States: The Evolution of a New Federalist Fiscal Order

The federalist fiscal structure of the United States has been evolving steadily towards the centralization of the financing of government services and transfers. Revenues are raised centrally and then transferred, via grants-in-aid, to state and local governments. This paper seeks to explain this movement towards centralized financing. Two alternative hypotheses are examined. The first--that aid is allocated to correct market or political failures in the local public economy or to equalize the provision of meritorious local public goods--generally fails to account for the distribution of federal aid over the past thirty years. The second hypothesis--that aid is allocated to ease the fiscal pressure in the state- local sector when, and only when, it is in the political interests of Congressional representatives to do so--is supported by the recent data. Our current system of federal grants to state and local governments is a logical outcome of a Congressional budget process that rewards the centralized financing and the localized provision of public good and services.

The Funding Status of Teacher Pensions: An Econometric Approach

The financing of public employee pensions has become an issue of growing public concern. This paper examines the fundinq status of teacher pension plans for the fifty states and for selected localities for the decade, 1971-1980. A pension underfunding equation based upon actuarial principles is specified and estimated using a sample of pension plans for which actuarially sound measures of underfundings are available. The ecometrically-estimated pension equationis then used to "predict" underfundings for each state and local pension plan for each year for which full pension plan data are available. The results reveal that the real dollar value of plan underfundings has risen by over 50% in the average state from 1971-1980. Strategies for funding these growing pension deficits are required.

RF radiation hazards to space station personnel

RF radiation hazards to space station personne