The Impact of the Great Recession and the Housing Crisis on the Financing of America's Largest CitiesThe housing crisis and the recession have placed tremendous fiscal pressure on the nation's central cities. Cuts in state government fiscal assistance to their local governments, plus shrinking property tax bases are challenging the ability of local governments to continue their current levels of public services.In this paper, we use data on the financing of the nation's largest central cities from 1997 to 2008 to forecast the impact of the recession and the housing crisis on central city expenditures between 2009 and 2013. Because expenditure responsibilities vary among city governments and because overlying governments play different roles, we develop the concept of constructed governments in order to allow us to compare the revenue-raising and spending policies of large central cities. We predict that real per capita spending in the average central city will be reduced by about seven percent during the forecast period, and that spending cuts will be substantially greater in cities hit hardest by the economic recession and the housing market collapse.

This paper relies on a review of the literature on property tax incentives for business, a new database on property tax economic development incentives, and several state case studies to identify pitfalls in using this economic development tool. Several potential reforms are identifi ed.

No abstract

Because fiscal institutions and arrangements differ widely across US cities, it has until now been very difficult to conduct comparative analysis of spending, revenues, and debt in US cities. This paper describes a new city fiscal dataset, called fiscally standardized cities (FiSCs), that directly addresses the varying roles of municipal governments, counties, school districts, and special districts in the financing of central cities. By taking systematic account of fiscal data for all the major units of government in large cities over a long time period , the FiSC data permit investigation of a wide range of important comparative policy issues for cities. The article describes the methodology used to construct FiSCs, and gives a number of examples to illustrate the potential uses of the FiSC data. For example, it shows how spending comparisons between cities can be fundamentally misleading unless account is taken of the varying roles of overlapping governmental units. It also demonstrates how the FiSC data can be used to benchmark fiscal data for one city against comparable cities.

The authors analyze the effects of property tax abatement on the property tax base and rates of school districts within a municipality offering the abatement using data from Franklin County, Ohio, one of the most populous counties in the United States. An increase in a school district’s Community Reinvestment Area abatement intensity correlates with (a) a decrease in the mill rate for real property, (b) a decrease in effective residential and nonresidential property tax rates, and (c) an increase in total market value of property. While these effects are small, they indicate that a municipality’s decision to abate has generated enough growth in property values, either through improvements to physical property or positive capitalization for existing property values, to offset the negative effects of an abatement. The reason for this may be that the restrictions and oversight used in this abatement program are greater than in most other places.