The structure of local taxation is an important determinant of the fiscal performance of decentralized public economies. In contrast to our understanding of local government spending, however, we know surprisingly little about how cities and states set taxes. This study specifies and estimates a...

The `Excessive Deficit Procedure' of the Maastricht Treaty on Economic and Monetary Union proposes two fiscal convergence conditions for entry and continued membership in the EMU: 1) a country's overall budget deficit for each fiscal year must be equal to or below 3% of GDP, and 2) a country's...

The recent debt crises in New York City and Cleveland, the deterioration of public infra-structures in certain of our states and larger cities, and the occasional bankruptcy of smaller pension plans suggest that not all of local finance stands on a sound fiscal base. This paper examines the...

The European Union is at a crossroads. At issue will be each of the three decisions which define a federal constitution: the number of participating governments, the assignment of policy responsibilities to the new EMU, and the representation of local interests in, and the decision-making rules...

With the renewed interest in cities as economic centers comes a need to understand how local public services and local taxes are likely to affect city economic performance. This paper provides an equilibrium model of an open city economy with mobile firms and resident workers. Given household...

The federalist fiscal structure of the United States has been evolving steadily towards the centralization of the financing of government services and transfers. Revenues are raised centrally and then transferred, via grants-in-aid, to state and local governments. This paper seeks to explain...

The financing of public employee pensions has become an issue of growing public concern. This paper examines the fundinq status of teacher pension plans for the fifty states and for selected localities for the decade, 1971-1980. A pension underfunding equation based upon actuarial principles is...

Recent proposals to reform the U.S. tax code all contain significant reforms of the cufrent provision allowing for the deductibility of state and local taxes.This paper examines the effect of deductibility reform on the revenue decisions of the largest U.S. cities. The analysis of eight...

The 2007-2010 recession has imposed significant fiscal hardships on state and local governments. The result has been state deficits and the need to increase state taxes, cut spending, and withdraw funds from state rainy day accounts. The primary cause of state budget "gaps" has been the rise in...

Using a sample of the 48 mainland U.S. states for the period 1973-2009, we study the ability of U.S. states to expand own state employment through the use of state deficit policies. The analysis allows for the facts that U.S. states are part of a wider monetary and economic union with free...