TABOR: Missing the Mark

Craig Maher:

Key to the discussion about state and local fiscal policy is the shared revenues program. While few would disagree with the premise that the shared revenues program was conceived in the early 1970s to compensate local governments for the State’s exemption of the manufacturing property and equipment, one cannot ignore the effect the program has been having on spending behavior.

Much of my research over the past six years has been on the impact of WI’s Shared Revenues program on local spending. It is important to understand that both in terms of the amount (nearly $1 billion annually) and the lack of strings attached to this aid (local governments can spend the money on whatever they see fit), WI is unique when compared to other states. While other states such as Florida, Massachusetts, Michigan, Minnesota and New Jersey have sizable intergovernmental aid programs, most are either tied to a specific revenue source such as sales or personal income taxes or require the funds to spent on specific programs/services.

Posted by Jim Zellmer at January 25, 2006 11:39 AM
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