In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

Yusun Kim is a doctoral candidate in Public Administration in Syracuse University. She’ll be presenting two papers at ABFM on “How Reduction in State Mandated Medicaid Spending Affect County Fiscal Behaviors: A Study of New York Counties” and “State Aid, Regular Property Assessment, and Assessment Outcomes: Evidence from New York State.” Her dissertation is on state and local public finance topics, supervised by Yilin Hou. Here is the abstract of the medicaid paper, which is Kim’s job market paper:

This paper aims to advance our empirical understanding about local fiscal responses to an intergovernmental fiscal policy that changes the way two levels of governments share the costs of a large public social insurance program. New York State in the United States passed a legislation in 2005 to cap the growth of county-level Medicaid spending, which abruptly decreased county Medicaid outlay in relative and absolute terms. This paper exploits the discontinuity in county Medicaid outlay to analyze the impact of the relief mandate on county budgets and property tax levies. The findings include a compositional change in county spending but no change in the total budget. In response to the cap policy, counties redirect most of their revenues to other general operational expenses and public employee benefits, while they also increase spending on public safety and community college education. The results show that New York counties reduce their property tax rate by approximately 0.64 to 1 mills on average, relative to comparison counties, two years after the cap is adopted. This study also intends to fill in the gap of the literature on how local governments respond to a sudden decrease instead of an increase in the outlay of a large mandatory spending category, which could potentially lead to property tax relief.

That paper is under review at International Tax and Public Finance, and she has publication experience in the form of two co-authored publications in Global Social Policy and Population Research & Policy Review.

You can see see Yusun Kim’s CV and research interests at her website here.

In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

Siân Mughan (SPEA-Indiana University) is the winner of ABFM’s Michael Curro Award for best graduate student paper for her work “Budget Deficits and Revenue Extracting Activities in the Criminal Justice System.” Her presentation is in the Saturday session at 8:15. I am chair of her dissertation, which is on a variety of challenges presented by financing government with the criminal justice system.

Through FOIAs of the Indiana Court Administration, Mughan obtains a decade of trial case administrative data. She then reviews how the state’s institutional rules over the local government budget process regulate property tax levies in a way that generates structural deficits and makes non-tax revenues like criminal justice fees more valuable on a dollar-for-dollar basis than tax revenues in the public budget. This sets up key hypotheses over multiple points in the lifecycle of trial cases, starting with law enforcement agencies issuing more tickets, to courts extracting more revenue per case, to judicial changes in sentencing, and finally the aggressiveness of enforcement penalties for defendants who fail to pay their court fees on time. Her results repeatedly reveal that the more valuable criminal justice fee revenue becomes under state rules, the more revenue aggressive the local criminal justice system becomes. I nominated her paper for the Curro award, and I think her work is a contender for the most important paper in public finance this year.

Other chapters of her dissertation explore the effects on politically vulnerable groups and the opening of municipal courts as a revenue generator. In addition to that paper, Siân has several author interesting articles:

• A solo-authored revise-and-resubmit at Public Administration Review on the topic of local government consolidation.
• A publication in Economic Development Quarterly which uses the synthetic control method to estimate the impact of Ohio’s repeal of the tangible personal property tax on manufacturing employment.
• A publication in Public Finance Review on how mass property reappraisals introduce fiscal illusion into local government.
• A paper under review at Journal of Public Administration Research & Theory on the use of Civil Asset Forfeiture in the states.

You can see Siân’s website here.

In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

Iuliia (Yulia) Shybalkina (Maxwell-Syracuse) will be presenting “What Makes Public Participation More “Pro-Poor”? Evidence from Participatory Budgeting” in the 8:15am Friday session. The associated article has a revise-and-resubmit with Public Budgeting and Finance, here is the abstract:

We attempt to measure the effects of participatory budgeting on the allocation of capital funding among areas of different income levels within New York City council districts. We created a longitudinal, geocoded dataset of all projects funded with council member capital discretionary money over nine years. We employ a difference-in-differences design, which compares changes in the allocation of funding in adopting districts before and after the adoption of participatory budgeting to changes over the same period among a control group consisting of later adopters. We find that, on average, adopting districts increase funding in the next to the lowest income census tracts more than the control group, but there is no evidence of participatory budgeting redirecting funds to the lowest income census tracts.

Her dissertation is “Does Citizen Engagement in Public Finance Administration Support or Undermine Equity?” and is chaired by Robert Bifulco. She has a second job market paper that similarly looks at participatory budgeting in New York City, this time looking the role of “dedicated and involved” public officials in helping low income neighborhoods obtain a larger share of capital projects. Her other work on property assessment appeals demonstrate her skills as a mixed-methods researcher.

Her profile page at Syracuse is found here.

In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

JoEllen Pope (UNC-Charlotte, Public Policy) is presenting “Isn’t a Flood a Rainy Day? Does the Political nature of Disasters Affect the Use of States’ Rainy Day Funds?” in the 9:45 session on Thursday. This paper is under review at Social Science Quarterly, and is viewable here. She has an MPA with a concentration in Emergency Management, is a practicing CPA, and a firefighter. Her dissertation, supervised by Dr. Suzanne M. Leland, is titled Flooded with Complexity: Do Organizational Structural Complexity, Coordination, and Managerial Discretion Impact Natural Disaster Preparedness?.  She has a publication forthcoming on political influences over election administration expenditures in the American Journal of Political Science and another three papers under review. Here is the abstract of the paper being presented at ABFM:

Abstract
Objectives: To determine if state lawmakers exploit Rainy Day Funds for political purposes in the aftermath of disasters rather than their intended purpose of combatting state economic downturns.

Methods: This research draws from multiple state-level data sources to construct a panel data set from 1992-2010.

Results: Disaster damage, relief funds, and politics all influence the level of states’ rainy day funds. We also find that politicians will tend to draw down the RDF balance more as disaster damages increases when it is an election year and the same party holds party control of the governor and legislature.

Conclusion: These findings are consistent with representative democracy and institutional theory, which argue that a state government’s action is comprised of a collection of choices made by individuals and those individuals seek to maximize their utility (re-election). This in turn produces political as opposed to more efficient decision-making in determining the use of RDFs.

Find more of JoEllen Pope’s research, teaching, and interests see her website here.

In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

Trang Hoang (School of Economic, Political and Policy Sciences – University of Texas at Dallas) has titles in several sessions:

• Pension Reforms and Public Sector Turnover (with Evgenia Gorina)
• Costs of Information Asymmetry in Bond Issuance (with Gorina and Jing Wang)
• Board Structure and Pension Investment Performance: Evidence from the Common Agency Approach (with Ken Kriz).

As you would probably guess, her dissertation (supervised by Drs. Evgenia Gorina and Doug Goodman) is on managing public retirement systems. She is lead author on a paper on Public Pension Reform and Collective Bargaining in State and Local Governments in Public Administration Review. She has another paper on pension reforms with a revise and resubmit at the Journal of Public Administration Research & Theory, so she has experience with the top journals of public administration. She has another two papers under review, as well as a published book review.

You can find Trang Hoan’s school profile here.

In preparation for ABFM’s upcoming conference in Denver, I am doing a series of profiles on the doctoral students on the job market.

Kattalina Berriochoa (McCormack Graduate School of Policy & Global Studies, UMass-Boston) is presenting “Analyzing Micro-Logic: Why Public Spending on Education Varies Across the Urban Rural Divide” in the 9:45 session on Friday. She presented a similar work at Georgia State’s “Next Generation Public Finance” conference back in the spring. Her dissertation explores how place (particularly urban, rural, suburban places) shapes preferences of the individual for redistributive financing.  Here is the abstract on one of her dissertation essays, “Public Finance for Schools: Analyzing Collective Preferences Across Place“:

The persistent urban-rural divide creates a host of economic disadvantages and interstate inequalities, including but not limited to funding variation for public education. This study provides an analysis local bond elections in Texas, with a focus on the urban and rural divide. This analysis shows that that odds and probability of passing a school bond can differ across place. The focus on place is to analyze the occurrence of preference variation where individuals do not always collectively demand more from government but rather often reject more spending on public goods. First, using data collected on over 2,000 bond elections in the state of Texas over the years 2000-2016, logistical regression models are estimated to determine the factors associated with the likelihood of passing a school district bond by local district election. Second, I analyze how collective preferences may be shaped differently across place with the employment of the Oaxaca-Blinder decomposition model. I find that across place (urban and rural), the effect of income has a relatively neutral impact. Across place, the increase of median age over time has a negative impact on the probability of passing a bond election and the increase of diversity among students in public schools is found to increase the likelihood of bond passage. This final effect of race is most substantial in rural places. Generally, I find that the impact of variables in the urban and rural model behave in similar directions. Variation results from the magnitude of effects, where parameters are found to hold larger sway in more rural places, compared to urban counterparts. I find additional support for this finding with the employment of a decomposition model, which finds that when the key variables are taken into account, the magnitude of age, income, and race differ considerably on the collective preferences of voters regarding bond elections across place. The goal of this study is to highlight the way in which preferences are shaped by place and how that may feed back into the distribution of funding for public goods.

Berriochoa’s work on public opinion, public finance, and what drives diverging preferences between urban and rural communities sounds informative to understanding national politics at large. She lists additional works in progress on gender diversity in local government leadership, and the role of professional identity and legitimacy of leaders in government regulation. She has a paper under review that examines media consumption by the Basque Diaspora in the United States. In addition to her works in progress, Berriochoa describes an interest in language policy and teaches Basque, and has several publications related to teaching.

Find more of Kattalina Berriochoa’s research, teaching, and interests here.

There are two new articles that are interesting to pair together, one in Southern Economic Journal and the other in Public Budgeting and Finance.  I’m just going to put their title and abstract below:

“Public budgetary rules and GDP growth: An empirical study on OECD and twelve european countries.” Southern Economic Journal, by Elton Beqiraj, Silvia Fedeli, and Francesco Forte. Abstract:

We study the long‐term effects of budgetary rules on GDP growth rate and analyse the determinants of the short‐term GDP growth dynamics. For both a sample of 19 OECD and a subsample of 12 European countries, we show that, in the long run, improvements in the cyclically adjusted budget balance, as well as increases in the tax burden, have negative effects on GDP growth. The highest effect of fiscal policy on GDP growth would be obtained if the structural deficits were used to increase the market size by reducing the tax burden. In line with Barro (1990), a deficit‐financed reduction of tax burden has a stronger effect for European than for OECD countries, because in Europe the government size with respect to market size is too large. Therefore, if GDP growth is a dominant policy objective, in Europe specific actions should redress the 2012 Treaty toward a reduction of the tax burden.

“Budgetary Balances Adjustments From Governmental Accounting to National Accounts in EU Countries: Can Deficits Be Prone to Management?” Public Budgeting & Finance, by Susana Jorge, Maria Antonia Jesus, Raul Laureano.

European Union (EU) countries are required to achieve deficit targets and are thus incentivized to use tools to keep within budgetary limits. This paper argues that accounting discretion might be used to manage some adjustments made during the translation of data from Governmental Accounting (GA) into National Accounts (NA), to window‐dress the final deficit/surplus reported to EUROSTAT. The empirical research shows there are certain circumstances that might facilitate the use of GA–NA “adjustment discretion.” EU authorities must pay special attention to these conditions to ensure the reliability of reported deficits. The main findings of this paper could also assist in future efforts to improve the integrity of the adjustment process.

 

One argument for state regulation of local government financial management (e.g. limits on debt issuance, limits on expenditure growth, etc.) is the plausibility of negative fiscal externalities.  That municipal bankruptcies might spillover and contaminate other local governments is a popular example, so much so that it even got its own plotline in the show Parks and Recreation. The argument is that bankruptcy will cause investors to look more suspiciously at, and accordingly demand higher risk premiums from, the municipal bond market that will drive up the borrowing cost for other local governments.

Public Administration Review has a new research article by Lang Yang (George Washington University) titled “Negative Externality of Fiscal Problems: Dissecting the Contagion Effect of Municipal Bankruptcy.” The paper revisits one of the more extreme cases of municipal bankruptcy, Jefferson County (AL) in 2011, and attempts to determine the presence of these contagion effects. She provides a helpful taxonomy for types of contagion effects that are either “general” or “case specific” that can be operationalized as hypothesis. These are summarized in her Table 1:

Using a difference-in-differences regression at other local governments in Alabama she finds no evidence for the general contagion effects: Being in Alabama, or geographically closer to Jefferson County, had no adverse effects on municipal borrowing costs. Importantly, this may be because Jefferson County’s bankruptcy cause was not driven by local or regional economic factors, but rather “mismanagement of a large infrastructure projects and use of unconventional financial instruments” (page 2). However, this is also important because she finds some evidence that borrowing costs declining for other local governments, as she does some additional investigation (see page 8 and Table 6) to show that it seems investors with a preference for Alabama simply reallocated their loanable funds to other local municipalities.

Yang does find evidence of case specific contagion factors, however, in that she finds that other local governments that similarly shared a “full faith and credit” commitment were reevaluated by local investors to the tune of 6 or 7 basis points on their borrowing costs. That is, local governments trying to borrow general obligation debt without the backing of committed taxes had been revealed as potentially unsecured credit in a bankruptcy proceeding.

It is a thoughtful paper with important implications for the motivation of state policy over local governments, particularly with respect to bankruptcy protection.

The 2018 recipient of the Daniel M. Holland Medal is Michael Keen of the IMF. From their announcement:

The National Tax Association is pleased to announce the 2018 award winner, Michael Keen, International Monetary Fund.

Michael “Mick” Keen, Deputy Director of the Fiscal Affairs Department at the International Monetary Fund, has made fundamental contributions to the theory and practice of public finance, advancing our understanding of complex issues in a clear and insightful manner. His work combines impeccable academic rigor with deep policy relevance.

Mick’s work spans a wide range of important topics in public finance, notably including tax competition and tax coordination, the value-added tax, tax issues in developing countries, the tax treatment of the financial sector, environmental tax policy, corporate income taxation, fiscal federalism, and the interplay between tax and trade policy. His work has been published in leading economic journals; he has also written and edited several books, including The Modern VAT; the Taxation of Petroleum and Minerals; and Digital Revolutions in Public Finance. His work has pushed forward the frontier of both theoretical and empirical research in public finance.

Before joining the IMF, he was Professor of Economics at the University of Essex. Mick was awarded the CESifo-IIPF Musgrave prize in 2010, and is Honorary President of the International Institute of Public Finance. He has served on the Board of the National Tax Association, and on the editorial boards of several journals, including International Tax and Public Finance, of which he was joint founder.

Mick’s work will be celebrated and he will receive the award in November at NTA’s 111th Annual Conference on Taxation in New Orleans.

The Daniel M. Holland Medal was created in 1993 in memory of Dan Holland, a Professor of Economics at the Massachusetts Institute of Technology Sloan School of Management. He wrote several books and numerous articles on a wide range of topics in taxation and served as a consultant to the U.S. Department of the Treasury, foreign governments, and private companies. Dan was a leading figure in the NTA for many years, serving as president in 1988–1989 and as editor of the National Tax Journal for 25 years from 1966–1991. The Holland Medal is the most prestigious award given by the NTA, as it recognizes lifetime achievement in the study of the theory and practice of public finance. A committee of NTA members constituted by the Board of Directors makes a formal nomination of the award recipient each year for approval by the Board, and the medal is awarded at the Annual Conference on Taxation.

The October 2018 issue of International Tax & Public Finance has been released. Below are the table of contents. The working paper version of the Richard Bird essay was previously discussed on this blog here.

Optimal family taxation and income inequality 
Patricia Apps, Ray Rees

Sub-metropolitan tax competition with household and capital mobility 
Tidiane Ly

A test of fiscal sustainability in the EU countries 
Kyung-woo Lee, Jong-Hee Kim, Taeyoon Sung

Specific versus ad valorem taxes in the presence of cost and quality differences 
Kuang-Cheng Andy Wang, Ping-Yao Chou, Wen-Jung Liang

Distributional and revenue effects of a tax shift from labor to property
Jörg Paetzold, Markus Tiefenbacher

Is capital back? The role of land ownership and savings behavior 
Max Franks, David Klenert, Anselm Schultes

Tax treaties and foreign direct investment: a network approach 
Sunghoon Hong

Optimal tax routing: network analysis of FDI diversion 
Maarten van ‘t Riet, Arjan Lejour

Are global taxes feasible?
Richard M. Bird