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The Revenue Module

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The Local Budget as a Complex System

Part of the book series: Palgrave Studies in Public Debt, Spending, and Revenue ((PDSR))

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Abstract

Local government revenue sufficiency has been a long studied problem. This chapter analyzes the revenue sources for the jurisdiction. It identifies a variety of sources—property taxes, sales taxes, grants, fees and charges, cash management returns, employee contributions and other sources. It discusses equity issues, incentives for revenues, and constraints on revenues. It discusses tax base issues, tax innovations such as tax increment financing and community facilities districts, and the importance of land use decisions. It examines the impact of revenues on expenditures and vice versa. The chapter demonstrates both the complexity of the revenue system and how dynamic capabilities have generated new revenue sources that have added to this complexity.

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Notes

  1. 1.

    There are many other small sources of revenues that will not be considered in this analysis.

  2. 2.

    Note that not all the connections are illustrated in order to keep Fig. 3.2 intelligible.

  3. 3.

    Large lot or even single-family zoning is a contribution to the affordable housing crises which many cities are experiencing.

  4. 4.

    However, just because they do not raise much money does not mean that they should be ignored. It may be that this is an unexplored arena for local revenue.

  5. 5.

    Mines, agriculture, residential, residential rental, railroad and airline flight property, non-commercial historic property (including foreign trade zone property and enterprise zone property), historic commercial and industrial property, residential rental historic property and possessory interest, and real property (Arizona Tax Research Association, 2016).

  6. 6.

    See Youngman (2016) for a more detailed and straightforward analysis of the incidence discussion.

  7. 7.

    In California, Enhanced Infrastructure Financing Districts have replaced TIFs (Horiuchi & Chapman, 2019).

  8. 8.

    Called Mello-Roos Districts in California.

  9. 9.

    Chapman (2013) or Hendrick (2013).

  10. 10.

    In some jurisdictions, it may be possible to issue debt to raise revenues. Aside from capital projects or activities that generate a secure cash flow, this is a very risky behavior.

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Authors and Affiliations

  1. Arizona State University, Scottsdale, AZ, USA

    Jeffrey Chapman

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  1. Jeffrey Chapman
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Correspondence to Jeffrey Chapman .

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Chapman, J. (2022). The Revenue Module. In: The Local Budget as a Complex System. Palgrave Studies in Public Debt, Spending, and Revenue. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-94903-7_3

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  • DOI: https://doi.org/10.1007/978-3-030-94903-7_3

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  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-94902-0

  • Online ISBN: 978-3-030-94903-7

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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