IDEAS home Printed from https://ideas.repec.org/a/fip/fedker/y2011iqiiip71-100nv.96no.3.html
   My bibliography  Save this article

What is the outlook for local government revenues in the Tenth District?

Author

Listed:
  • Alison Felix

Abstract

Local governments, which rely heavily on property taxes and fund transfers from state governments, continue to struggle with slowing revenues - a situation that is likely to persist over the next few years. As new property tax assessments reflect declines in house prices, local property tax revenues may fall in some areas unless tax rates are increased. In addition, decreases in state revenues have led to a slowdown in state transfers to local governments. ; Felix finds that for this downturn, local government revenues from property taxes and state transfers combined were likely slowest in fiscal year 2011. That weakness may continue for several years, especially if home prices decline further. Despite declines in home prices and state government revenues, projections based on historical experience suggest local governments may avoid outright declines in revenues, in part, because of their ability to raise tax rates to offset declines in property values. However, recent local property tax collections have been lower than projected, hinting that the severity of the recent recession may have led local governments to deviate somewhat from historical trends. ; The outlook for most Tenth District states, however, is somewhat brighter than the rest of the nation. House prices generally have held up better in the district, and after sharp declines in state revenues in fiscal years 2009 and 2010, many Tenth District states are experiencing positive growth. Still, local revenue growth in the region is likely to remain somewhat subdued in the near term.

Suggested Citation

  • Alison Felix, 2011. "What is the outlook for local government revenues in the Tenth District?," Economic Review, Federal Reserve Bank of Kansas City, vol. 96(Q III), pages 71-100.
  • Handle: RePEc:fip:fedker:y:2011:i:qiii:p:71-100:n:v.96no.3
    as

    Download full text from publisher

    File URL: https://www.kansascityfed.org/documents/1105/2011-What%20Is%20the%20Outlook%20for%20Local%20Government%20Revenues%20in%20the%20Tenth%20District%3F.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lutz, Byron F., 2008. "The Connection Between House Price Appreciation and Property Tax Revenues," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(3), pages 555-572, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diarmaid Addison-Smyth & Kieran McQuinn, 2010. "Quantifying Revenue Windfalls from the Irish Housing Market," The Economic and Social Review, Economic and Social Studies, vol. 41(2), pages 201-233.
    2. Ivanov, Ivan T. & Zimmermann, Tom, 2024. "The “Privatization” of municipal debt," Journal of Public Economics, Elsevier, vol. 237(C).
    3. Lutz, Byron & Molloy, Raven & Shan, Hui, 2011. "The housing crisis and state and local government tax revenue: Five channels," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 306-319, July.
    4. David Cashin & Jamie Lenney & Byron Lutz & William Peterman, 2018. "Fiscal policy and aggregate demand in the USA before, during, and following the Great Recession," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(6), pages 1519-1558, December.
    5. Mayda, Anna Maria & Senses, Mine & Steingress, Walter, 2023. "Immigration and Provision of Public Goods: Evidence at the Local Level in the US," CEPR Discussion Papers 18054, C.E.P.R. Discussion Papers.
    6. Glenn Follette & Byron Lutz, 2010. "Fiscal Policy in the United States: Automatic Stabilizers, Discretionary Fiscal Policy Actions, and the Economy," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 48(1), pages 41-73, Junio.
    7. Gupta, Arpit & Van Nieuwerburgh, Stijn & Kontokosta, Constantine, 2022. "Take the Q train: Value capture of public infrastructure projects," Journal of Urban Economics, Elsevier, vol. 129(C).
    8. Siodla, James, 2020. "Debt and taxes: Fiscal strain and US city budgets during the Great Depression," Explorations in Economic History, Elsevier, vol. 76(C).
    9. Ihlanfeldt, Keith R. & Willardsen, Kevin, 2014. "The millage rate offset and property tax revenue stability," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 167-176.
    10. Alm, James & Buschman, Robert D. & Sjoquist, David L., 2011. "Rethinking local government reliance on the property tax," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 320-331, July.
    11. Matthew Davis & Fernando V. Ferreira, 2017. "Housing Disease and Public School Finances," NBER Working Papers 24140, National Bureau of Economic Research, Inc.
    12. McQuinn, Kieran & Addison-Smyth, Diarmaid, 2015. "Assessing the Sustainable Nature of Housing-Related Taxation Receipts: The Case of Ireland," Papers WP503, Economic and Social Research Institute (ESRI).
    13. Follette, Glenn & Kusko, Andrea & Lutz, Byron, 2008. "State and Local Finances and the Macroeconomy: The High–Employment Budget and Fiscal Impetus," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(3), pages 531-545, September.
    14. Mengkai Chen & Ting Chen & Debao Ruan & Xiaowei Wang, 2023. "Land Finance, Real Estate Market, and Local Government Debt Risk: Evidence from China," Land, MDPI, vol. 12(8), pages 1-18, August.
    15. Davis, Matthew & Ferreira, Fernando, 2022. "Housing disease and public school finances," Economics of Education Review, Elsevier, vol. 88(C).
    16. Jerch, Rhiannon & Kahn, Matthew E. & Lin, Gary C., 2023. "Local public finance dynamics and hurricane shocks," Journal of Urban Economics, Elsevier, vol. 134(C).
    17. Feler, Leo & Senses, Mine Zeynep, 2016. "Trade Shocks and the Provision of Local Public Goods," IZA Discussion Papers 10231, Institute of Labor Economics (IZA).
    18. Tammy Leonard & Xi Yang & Lei Zhang & Connor Reed, 2020. "Impact of Property Tax Abatement on Employment Growth," Economic Development Quarterly, , vol. 34(2), pages 209-221, May.
    19. Alm, James & Buschman, Robert D. & Sjoquist, David L., 2014. "Foreclosures and local government revenues from the property tax: The case of Georgia school districts," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 1-11.
    20. Tom Downes & Kieran M. Killeen, 2014. "So Slow to Change: The Limited Growth of Nontax Revenues in Public Education Finance, 1991–2010," Education Finance and Policy, MIT Press, vol. 9(4), pages 567-599, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:2011:i:qiii:p:71-100:n:v.96no.3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Zach Kastens (email available below). General contact details of provider: https://edirc.repec.org/data/frbkcus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.