New England legislators focused on the long run fiscal challenges of funding infrastructure and crafting tax systems that will be fair, efficient, and stable at the annual Economic Perspectives on State and Local Taxes seminar at the Lincoln Institute earlier this month. State legislators from each of the six New England states reviewed trends in capital spending and infrastructure needs, property taxes, and state business taxes at the event, organized in partnership with the New England Public Policy Center of the Federal Reserve Bank of Boston.
The presentations can be viewed on our SlideShare page by clicking on the name of each speaker.
Ron Fisher, professor of economics at Michigan State University and visiting scholar, New England Public Policy Center at the Federal Reserve Bank of Boston, found that capital spending in New England is significantly below the national average by all measures, possibly due to efforts to limit government debt. Brian Pallasch, managing director for government relations and infrastructure initiatives of the American Society of Civil Engineers, pointed to a $1.6 trillion gap nationally in infrastructure spending over the next five years. Edi Tebaldi, associate professor of economics at Bryant University, suggested that public-private partnerships could help. Fellow Lourdes Germán presented on the current realities of how municipalities fund infrastructure via bond financing.
Addressing current issues in property taxation, Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, reviewed effective property tax rates for homeowner, apartment, commercial, and industrial properties in the 50-State Property Tax Comparison Study.
John Anderson, professor of economics at the University of Nebraska and a visiting fellow at the Lincoln Institute, concluded that the property tax remains the most stable revenue source over time, compared with the sales and income tax. Bo Zhao, senior economist at the New England Public Policy Center of the Federal Reserve Bank of Boston, shared research on non-school fiscal disparities in Connecticut.
In a broad-ranging discussion of reforms in state taxation of business, David Merriman, professor of public administration at the University of Illinois-Chicago, argued that states need to think strategically about how they tax businesses, keeping in mind the tradeoff between revenue generated and jobs created. Jared Walczak, a policy analyst with the Tax Foundation, looked at how state tax costs of doing business vary by state and by business type. Greg LeRoy, executive director of Good Jobs First, presented a study of economic development programs in the U.S., finding that large businesses reap the vast majority of tax incentive dollars, thereby shortchanging small business. Finally, LeAnn Luna, a professor at the University of Tennessee, concluded the seminar with a strong critique of the state corporate income tax, and an explanation of some alternatives including a gross receipts tax or value added tax.
The annual seminar aims to improve dialogue and inform policymakers in the Lincoln Institute’s continuing campaign to promote fiscal health.