State Tax Policy, Municipal Choice, and Local Economic Development Outcomes: A Structural Equation Modeling Approach to Performance Assessment

• 成果类型: Article
• 署名作者: Hall, Jeremy L.; Kanaan, David Z.
• 署名单位: State University System of Florida; University of Central Florida; California State University System; San Diego State University
• 刊物名称: PUBLIC ADMINISTRATION REVIEW
• ISSN/ISSBN: 0033-3352
• DOI: 10.1111/puar.13165
• 发表日期: 2021
• 页码: 459-474
• 关键词: development strategies; innovation capacity; SALES TAXES; management; poverty; adoption; GROWTH; METROPOLITAN; foundation; welfare

摘要

Do state policies that allow municipal governments to levy economic development taxes stimulate economic development? Texas allows municipal-level economic development corporation dedicated local option sales taxes (LOST), effectively diverting revenue from general fund purposes exclusively toward local economic development efforts. Drawing from a performance management framework focused on policy outcomes, the authors use a structural equation model to estimate the effects of local tax choices on economic development performance. The results reveal that municipalities implementing the 4a LOST tax choice (traditional industry-related efforts) experienced a significant and positive effect on economic development as measured through a latent construct assessing five years of growth in population, property value, and new home construction. The observed impact of tax choice, though weaker than preexisting municipal economic capacity, suggests that states and municipalities can influence economic development activity by permitting municipal choice in the allocation of tax revenues dedicated to economic development.