Local Government Fiscal Burden in Nonmetropolitan America¹

Abstract

Rising fiscal pressure on local governments in rural areas of the United States is documented in this study. The level of fiscal burden on taxpayers to support local governments in non metropolitan areas is found to be high'er than that in metropolitan areas between 1977 and 1987. Using a model from the urban fiscal literature, the level of fiscal burden in nonmetropolitan areas is found to be influenced by a combination of demographic, socioeconomic, intergovernmental, and historical factors. Intergovernmental revenue transfers from the state and federal government play a critical role in determining the level of fiscal burden rural taxpayers bear. These findings have implications for rural economic development and for understanding how rural areas are influenced by the larger society.

Poverty and Local Governments: Economic Development and Community Service Provision in an Era of Decentralization

“…On the other hand, poorer counties are more likely to have established an industrial park and have greater own source revenues to expenditures. Johnson et al. (1995) also find counties with higher poverty rates have greater revenues to expenditures, in contrast to expectations: they argue this may reflect less willingness to spend scarce resources.…”

Civic government or market-based governance? The limits of privatization for rural local governments

“…As federal aid has declined, state aid has risen. State aid is redistributive and has become more so over time (Johnson et al 1995;Warner 2001). State policy can play a redistributive role, helping to reduce the negative impact of the rural structural deficits.…”

Local Economic Development in an Age of Devolution: The Question of Rural Localities*

“…Rural local governments are already more likely to face challenges to local fiscal well-being due to below average capacities to raise revenues through taxation and above average costs of providing services (Cigler 1993;Warner 1999). At the same time, research indicates that rural local governments are increasingly dependent upon state aid to ease local governmental fiscal burden ( Johnson et al 1995). In the face of changing intergovernmental relationships, rural localities may only become more dependent upon states' willingness to provide a redistributive function.…”