Budget Gimmicks

Block, Cheryl D.

doi:10.1017/cbo9780511511462.004

Cited by 7 publications

(6 citation statements)

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“…Furthermore, dealing with the supermajority rule may tie up much more resources than necessary (e.g., litigation fees for lawsuit). Finally, the requirements may distract legislators and voters from important social and fiscal policy objectives (Block 2008).…”

Section: Resultsmentioning

confidence: 99%

Do States Circumvent Constitutional Supermajority Voting Requirements to Raise Taxes?

Lee

2018

State Politics Policy Q.

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To constrain legislative taxing power, 16 U.S. state constitutions require a supermajority in both chambers to increase or impose taxes. Both supporters and opponents of the requirement argue that its effect fades away because states circumvent it in various ways, especially by raising fees that are not subject to the requirement. Existing literature, however, offers little and inconsistent evidence on whether the effect decays over time and whether the decay results from fee hikes. This article documents legal cases to show the ways in which states have responded to the requirement, estimates whether the effects of the requirement decay over time, and tests whether states raise fees instead of taxes after adopting such a requirement. Using state-level panel data, I find that the initial effectiveness of the requirement on tax burden does decay approximately a decade after enactment and that the decay is not the result of fee increases.

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Section: Resultsmentioning

confidence: 99%

Do States Circumvent Constitutional Supermajority Voting Requirements to Raise Taxes?

Lee

2018

State Politics Policy Q.

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“…35 33 See, for example, Public Fund Survey (2013) available at http://www.publicfundsurvey.org. Accumulation of future liabilities is masked by governments' use of a "cash-flow" based accounting method in which revenues (expenditures) are recorded when they are received (paid) instead of an "accrual" based accounting method which records revenues (expenditures) when the rights to receive (obligations to pay) arise (Block 2008). 34 Our simple calculations, based on the Census Bureau state employment data (available at http://www.…”

Section: Club Convergence Resultsmentioning

confidence: 99%

Are state–local government expenditures converging? New evidence based on sequential unit root tests

Mahdavi

Westerlund

2016

Empir Econ

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Large and persistent gaps in subnational public expenditure have important implications regarding growth, equity, and migration. In this context, we revisit the question of expenditure convergence across the American states to provide more nuanced evidence than found by a small number of previous studies. We employ a methodology due to Smeekes (Bootstrap sequential tests to determine the stationary units in a panel, 2011) that sequentially tests for unit roots in pairwise (real per capita) expenditure gaps based on user specified fractions. In a panel of 48 combined state-local government units , we found that expenditures on highways, sanitation, utility, and education were far more convergent than expenditures on health and hospitals, police and fire protection, and public welfare. There was little evidence of "club convergence" based on the proportion of intraregional convergent pairs. Several historically high-grant receiving states showed relatively strong evidence of convergence. Our results bode well for future output convergence and opportunities for Tiebout-type migration across jurisdictions. They also imply a diminished role for public infrastructure and education spending in business location choices over time and a mixed role for federal grants in inducing convergence.

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“…In a systematic empirical examination of U.S. states, Costello et al . () find indirect evidence that governments meet stringent cash‐based balanced‐budget rules by deferring payments and direct evidence that they do so by selling assets (see also Block, , and Bifulco et al ., ). Examining governments subject to IMF‐ and World Bank‐supported adjustment programs in the 1980s and 1990s (which set targets for cash deficits) Easterly () finds suggestive evidence of the deferral of deficits rather than sustained reductions.…”

Section: Defining the Debt And Deficitmentioning

confidence: 99%

Defining the Government's Debt and Deficit

Irwin

2015

Journal of Economic Surveys

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Abstract. Although the budget deficit and the public debt feature prominently in political debate and economic research, there is no agreement about how they should be measured. They can be defined for different sets of public institutions, including the nested sets corresponding to central government, general government, and the public sector, and, for any definition of government, there are many measures of the debt and deficit, including those generated by four kinds of accounts (cash, financial, full accrual, and comprehensive), which can be derived from four nested sets of assets and liabilities. Each debt and deficit measure says something about public finances, but none tells the whole story. Each is also vulnerable to manipulation, and is likely to be manipulated if it is subject to a binding fiscal rule or target. Narrow definitions of government encourage the shifting of spending to entities outside the defined perimeter of government. Narrow definitions of debt and deficit encourage operations involving off-balance-sheets assets and liabilities, while broad measures are susceptible to the mismeasurement of on-balance-sheet assets and liabilities. Reviewing the literature on these issues, the paper concludes that governments should publish several measures of the debt and deficit in a form that clearly reveals their interrelationships.

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Budget Gimmicks

Cited by 7 publications

References 0 publications

Do States Circumvent Constitutional Supermajority Voting Requirements to Raise Taxes?

Do States Circumvent Constitutional Supermajority Voting Requirements to Raise Taxes?

Are state–local government expenditures converging? New evidence based on sequential unit root tests

Defining the Government's Debt and Deficit

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