Tax

Learning from Experience: A Primer on Tax Increment Financing

Learning from Experience: A Primer on Tax Increment Financing
Fiscal Brief, New York City Independent Budget Office, September

Devine, T.
01/01/2002

To fund the estimated $1.5 billion extension of the No. 7 subway and perhaps other redevelopment proposals on Manhattan’s Far West Side, there has been increasing discussion of using a borrowing method known as tax increment financing, or TIF. The basic idea underlying TIF is that a city or town finances an improvement in a specific district with the property tax revenue generated by that improvement. While TIF has been used extensively throughout the country in cities such as Chicago, Los Angeles, and Washington, D.C., it has never been used here. This report provides a primer on TIF––what it is, key features of the laws that authorize it, the types of projects undertaken, some of the reasons for its popularity, and a review of how it has worked in some other localities. Among the lessons from our review: • While TIF has proven to be an effective and flexible financing method in a variety of settings, some municipalities have encountered problems with their projects, including insufficient revenue to pay debt service. • TIF has been used to finance a variety of public works projects, but most have been small-scale. Larger projects usually have been joint ventures, mostly with private partners. No TIF project has been as costly as the proposed No. 7 extension. The report concludes with a discussion of issues that will have to be considered before relying on TIF for financing the proposed subway extension. These considerations will be more closely examined in a subsequent IBO report that will look at the viability of tax increment financing for extending the No. 7.

The 40-Hour Week: A Proposal to Increase the Productivity of Non-Managerial Civilian Municipal Workers

The 40-Hour Week: A Proposal to Increase the Productivity of Non-Managerial Civilian Municipal Workers
Citizens Budget Commission, December,

Brecher, C.
01/01/2002

This report presents and examines a deceptively simple idea: That a large group of municipal employees, about 67,000 "non-managerial civilians," increase their workweek from 35 to 40 hours. The purpose of this change is to yield a substantial savings for the City and its taxpayers by enabling fewer workers to provide the existing package of public services.

Local Property Taxation in Theory and Practice: Some Reflections

Local Property Taxation in Theory and Practice: Some Reflections
in Wallace E. Oates, editor, Property Taxation and Local Government Finance, Cambridge, MA: Lincoln Institute of Land Policy,

Netzer, D.
01/01/2001

The property tax is considered a most unpopular tax, among both scholars and taxpayers. Yet, recent research and analysis has proposed at least a partial rehabilitation of this tax and its role in the arena of local public finance. Based on a conference sponsored by the Lincoln Institute in January 2000, this book presents a systematic and comprehensive review of the economics of local property taxation and examines its policy implications. The ten papers and paired commentaries are written in a nontechnical form to make the findings available to a broad audience of policy makers and other noneconomists.

Tax and the City

Tax and the City
in Re-thinking the Urban Agenda, John Mollenkopf and Ken Emerson, eds., Century Foundation, pp. 63-74.

Schwartz, A.E.
01/01/2001

The culmination of a year-long lecture series cosponsored by The Century Foundation and the City University of New York Graduate Center's Center for Urban Research, 'Rethinking the Urban Agenda' takes up the challenge provided by a changing of the guard in New York City government-the election of a new mayor and city council-to outline a new conceptual and political road map for New York City's future and, in many important respects, for the future of urban America.

Federal Housing Policy and the Rise of Nonprofit Providers

Federal Housing Policy and the Rise of Nonprofit Providers
Journal for Housing Research, 11(2):297-317.

O'Regan, K. & Quigley, J.M.
01/01/2000

During the past decade, federal housing policy has shifted to recognize a key role for nonprofit housing providers in providing affordable housing. Two federal programs, Low-Income Housing Tax Credit and HOME, are now the primary federal housing production programs, and the legislation governing both programs provides explicit support for nonprofit providers of new housing. This article focuses on these two programs to document the change in emphasis, looking at the extent to which resources flow to nonprofit providers. We explicate the rationale for this shift and speculate on future federal policy toward nonprofits.

We find that both programs channeled sizable shares of their funding to nonprofits throughout the 1990s, in patterns consistent with program design. It is also possible that the scale and form of funding itself has affected the nonprofit sector. Changes in the funding of nonprofits have not been uniform spatially, and the nonprofit sector's share of such funding appears to have leveled off. As currently structured, these programs do little to simplify the complicated financial dealings and multiple sources of funding common among nonprofit housing providers. Shifts in policy priorities and emerging financial stresses may necessitate changes in federal policy toward the nonprofit sector.

 

No Easy Answers

No Easy Answers
Brookings Review, Summer 2000, Vol. 18 Issue 3, p44, 4p.

Ellen, I.G. & Schwartz, A.E.
01/01/2000

Discusses the strategies applied to foster economic growth among cities in the United States. Measurement of the impact of economic development programs; Effectiveness of infrastructure investments to boost economic growth; Impact of tax cuts on economy; Development of sports stadiums and arenas.

Budget 2000 Project (7 volumes)

Budget 2000 Project (7 volumes)
Citizens Budget Commission, December .

Brecher, C. et al.
12/01/1996

The Budget 2000 Project recommends actions that will reduce the cost of government in New York by between $12.8 and $19.7 billion, amounts large enough not only to balance the budgets of the Two New Yorks, shift the local government costs of public assistance and Medicaid to the State, and fund salary increases for workers who assist in the restructuring, but still leave at least $9.3 billion to improve New York's competitiveness by investing in the infrastructure, enhancing services and cutting taxes.

On the Progressivity of the Child Care Tax Credit: Snapshot Versus Time-Exposure Incidence

On the Progressivity of the Child Care Tax Credit: Snapshot Versus Time-Exposure Incidence
National Tax Journal, March, pp 55-71.

Schwartz, A.E. & Altshuler, R.
01/01/1996

We evaluate the progressivity of the federal Child Care Tax Credit using the Ernst and Young/ University of Michigan panel of tax return data. Incidence measures are calculated using both annual and "time-exposure" income to measure ability to pay. Both indicate that the benefits of the credit are progressively distributed. Replacing annual with time-exposure income dramatically increases the proportion of the credit received by lower-income taxpayers and yields a more even distribution of benefits across middle- and upper-income taxpayers. Our results suggest that policymakers should use both income measures to evaluate the credit.

Decentralization, Externalities, and Efficiency

Decentralization, Externalities, and Efficiency
Review of Economic Studies 62, April 1995, 223-247.

Morduch, J. Klibanoff, P.
01/01/1995

In the competitive model, externalities lead to inefficiencies, and inefficiencies increase with the size of externalities. However, as argued by Coase, these problems may be mitigated in a decentralized system through voluntary coordination We show how coordination is limited by the combination of two factors: respect for individual autonomy and the existence of private information. Together they imply that efficient outcomes can only be achieved through coordination when external effects are relatively large Moreover, there are instances in which coordination cannot yield any improvement at all, despite common knowledge that social gains from agreement exist This occurs when external effects are relatively small, and this may help to explain why coordination is so seldom observed in practice. When improvements are possible, we describe how simple subsidies can be used to implement second-best solutions and explain why standard solutions, such as Pigovian taxes, cannot be used. Possible extensions to issues arising in the structure of research joint ventures, assumptions in the endogenous growth literature, and the location of environmental hazards are also described.

Evaluating the Success of Need-Based State Aid in the Presence of Property Tax Limitations

Evaluating the Success of Need-Based State Aid in the Presence of Property Tax Limitations
Public Finance Quarterly, Oct 92, Vol. 20 Issue 4, p483, 16p.

Reschovsky, A. & Schwartz, A.E.
10/01/1992

Discusses the use of grants-in-aid to reduce fiscal disparities by local governments in the United States. Method used in Massachusetts to account for differences among communities in fiscal costs and resources; Indepth look at expenditure determination in tax limitations; Estimation of local government expenditures.

Pages

Subscribe to Tax