Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55583
Authors: 
Bradbury, Katharine
Zhao, Bo
Year of Publication: 
2007
Series/Report no.: 
Working paper series // Federal Reserve Bank of Boston 06-19
Abstract: 
This paper develops new measures of environmental costs and local revenue capacity as the basis for a new municipal aid formula in Massachusetts. On the cost side, unlike previous studies, we quantify the effects on local non-school spending of characteristics related to uncontrollable costs. On the capacity side, we account for the constraints of a tax limitation, for the first time in the literature, by estimating these constraints as a function of residents' incomes. The estimates of costs and capacity indicate substantial inter-local fiscal disparities in Massachusetts. Our approach is potentially applicable to other states.
Subjects: 
Fiscal disparities
municipal costs
revenue capacity
property tax
state aid
tax limitation
JEL: 
H70
H71
H72
H73
H77
H83
H20
Document Type: 
Working Paper

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