Structuring healthy communities
Download
1 / 45

STRUCTURING HEALTHY COMMUNITIES - PowerPoint PPT Presentation


  • 66 Views
  • Uploaded on

STRUCTURING HEALTHY COMMUNITIES. TAX REVENUE GENERATION AND FISCAL HEALTH. Presentation to the Governmental Research Association August, 2007. LeeAnne Clayberger Kerry Moyer. STUDY OBJECTIVES. Detail the relative fiscal health of Pennsylvania’s municipalities

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' STRUCTURING HEALTHY COMMUNITIES' - skylar


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Structuring healthy communities

STRUCTURING HEALTHY COMMUNITIES

TAX REVENUE GENERATION AND FISCAL HEALTH


Presentation to the governmental research association august 2007

Presentation to the Governmental Research AssociationAugust, 2007

LeeAnne Clayberger

Kerry Moyer


Study objectives
STUDY OBJECTIVES

  • Detail the relative fiscal health of Pennsylvania’s municipalities

  • Identify formidable threats to revenue generation (for instance, existing state legislation)

  • Determine public attitudes toward local government and fiscal health


The study
THE STUDY

  • Includes 2,551 municipalities

  • Compares fiscal health with tax effort and tax capacity

  • Looks at changes from 1970 to 2003

  • Uses maps to tell the story


Fiscal health measures
Fiscal Health Measures

  • EFFORT (two components)

    Total Non-Real Estate Resident Tax Revenue

    Aggregate Household Income

    Total Real Estate Revenue

    STEB Market Value (Market Based Millage)


Fiscal health measures1
Fiscal Health Measures

  • CAPACITY

    5% of STEB Market Value +

    Aggregate Household Income

    Number of Households



Five stages of municipal fiscal health
Five Stages of Municipal Fiscal Health

  • Prosperity with low taxes

  • Increasing demand for services and gradually rising tax rates and service fees

  • Taxes increase; reductions in non-core services

  • Tax revenues decrease; reductions in core services

  • Loss of tax base, population, and increasing fiscal distress


Current set of tools is insufficient to reverse the current momentum

Act 511 of 1965-menu of taxes, rates, caps

Act 111 of 1968-strikes and binding arbitration

Act 195 of 1970-right to organize/negotiate

Act 205 of 1984-funding employee retirement obligations

Act 47 of 1987-declaration of fiscal distress

Current set of tools is insufficient to reverse the current momentum


Keep local municipal identity but administer regionally
Keep local municipal identity but administer regionally

  • Fundamental mismatch between fluid economy and structured municipal boundaries

  • Pennsylvanians like their local governments to remain local

  • Research does not show a public outcry for consolidations and mergers of municipalities





Corridors
CORRIDORS with State Average


Example of a corridor
Example of a Corridor with State Average


Corridor example continued
Corridor Example, Continued with State Average


Geographic corridors
Geographic Corridors with State Average


Pennsylvania s cities
Pennsylvania’s Cities with State Average

  • Fiscally, PA’s most-distressed municipalities

  • All 56 fall below, and most fall significantly below, the state average for tax effort/capacity


Pennsylvania s boroughs
Pennsylvania’s Boroughs with State Average

  • Most severe negative change seen for boroughs in Adams, Allegheny, Beaver, Berks, Cambria, Chester, Dauphin, Delaware, Erie, Lawrence, Lehigh, Perry, Somerset and Westmoreland Counties


Pennsylvania s first class townships
Pennsylvania’s First Class Townships with State Average

  • 70 of 91 lost ground since 1970

  • One township moved from below to above average

  • 25 moved from above to below average


Pennsylvania s second class townships
Pennsylvania’s Second Class Townships with State Average

  • Group shows relative fiscal health with 948 (about 65%) above the state average

  • Since 1970 more townships became healthier (57%) than less healthy (43%)



The nature of clusters and subclusters

Boroughs cluster within fiscally distressed regions, but not within fiscally healthy regions

Many counties have subclusters with varied fiscal health

Clusters may present better ways to functionally consolidate services than groupings of adjacent communities

The Nature of Clusters and Subclusters


Reality vs tax policy
REALITY VS. TAX POLICY within fiscally healthy regions

Since 1970:

  • Significant population shifts (sprawl or suburbanization)

  • Growth in households, not population

  • Continued reliance on property taxes


Demographic changes from 1970 to 2003 inflation adjusted dollars averages per household
Demographic Changes from 1970 to 2003 within fiscally healthy regions*Inflation Adjusted DollarsAverages per household


Compounding factors 2003 not including philadelphia average per household
Compounding Factors, 2003 within fiscally healthy regions*Not including PhiladelphiaAverage per household


Problems identified

Overall, municipalities are increasingly fiscally distressed within fiscally healthy regions

There is a growing use of earned income taxes and fees, but many communities still rely heavily on property taxes

Revenue caps remain largely unchanged from the 1950s

There is a general lack of flexibility in current legislation

Communities need sufficient discretion in deciding how to tax themselves

Problems identified



Representation and responsiveness
Representation and Responsiveness within fiscally healthy regions

  • Citizens equate local government to the local officials who run them

  • Support of local government often stems from a fear of losing representation and local funds for local projects

  • Local officials are “people like us”


Limited knowledge of local government
Limited Knowledge of Local Government within fiscally healthy regions

  • Despite strong sentiment, citizens do not know a great deal about local governments, nor do they spend much time thinking about them

  • Most citizens are not concerned about fiscal distress as this “happens in larger cities”

  • Citizens in larger cities tended to underestimate their fiscal distress


Bigger is not necessarily better
Bigger is Not Necessarily Better within fiscally healthy regions

  • Local governments represent community norms in a manner that the state cannot

  • Even if wasteful and expensive, those issues are on a smaller scale for local government

  • Most citizens see local government as the primary form of government; state exists to serve local governments


State government is distant and unresponsive
State Government is Distant and Unresponsive within fiscally healthy regions

“…these people (local government officials) are all visible to us and I think that there’s probably a sense that the farther government gets away from the people, the less responsive they are going to be.”


Some support for functional consolidation
Some Support for Functional Consolidation within fiscally healthy regions

There was general support for functional consolidation when:

  • Local governments get their fair share

  • Services are improved

  • Money is saved

  • Directed toward health care and pension sharing, joint administration efforts, and regional police forces


Recommendation 1
RECOMMENDATION #1 within fiscally healthy regions

Allow communities to decide how and how much to tax locally

  • minimum restrictions

  • maximum constituent input


Recommendation 2 modernize and enhance existing tax revenue options for municipalities
RECOMMENDATION #2 Modernize and enhance existing tax revenue optionsfor municipalities

  • Occurs on the state level

  • Avoids “one-time fixes”

  • Evaluate outdated legislation and change or replace as necessary

  • Remove restrictions in lieu of local options


RECOMMENDATION #3 Place wide menu of revenue generating tools in communities to avoid future fiscal distress

  • Again, a subtle difference – “communities”, not municipalities

  • Includes sources of revenue in addition to taxes (fees, licensing, debt management)

  • Include counties, school districts, and local authorities


Recommendation 4 promote shared expertise for complex issues services
RECOMMENDATION #4 Promote shared expertise for complex issues/services

  • Volunteers especially need assistance

  • Provide incentives, if needed

  • Many municipalities cannot, on their own, afford professional or technical assistance


Recommendation 5 conduct further study
RECOMMENDATION #5 issues/servicesConduct further study

  • Define and standardize measures of fiscal health

  • Forecast future municipal fiscal health

  • Analyze the expenditure and services side of the fiscal equation

  • Create a baseline database

  • Pay particular attention to the costs of retirement systems, health care and tax collection (Part 2 will begin early fall)


ad