Fiscal home rule

Denver University Law Review

Volumn 86, Issue 4, 2009, Pages 1241-1261

  Gillette, Clayton P ^a  

^a NEW YORK UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70349838379     PISSN: 08839409     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (84)

1. See Conor Dougherty & Amy Merrick, States Squeeze Cities, Spreading the Economic Pain, WALL St. J., Dec. 118, 2008, at A4, available at http://online.wsj.com/article/SB122955325187 415831.html.
2. See Loretta Kalb & Robert Lewis, Revolt Brews in Counties, SACRAMENTO BEE, Feb. 5, 2009, at 1 A, available at http://www.sacbee.com/ capitolandcalifomia/story/1600656.html.
3. N. Y. Indep. Budget Office, Fiscal Outlook: As Economy Weakens, City's BUDGET Gaps SWELL 1 (2009), http://www.ibo.nyc.ny.us/iboreports/ FiscalOutlookJan2009.pdf.
4. City & County of Denver v. Sweet, 329 P.2d 441, 447 (Colo. 1958).
5. McCulloch v. Maryland, 17 U. S. 316, 327 (1819).
6. See, e.g., WILLIAM A. FISCHEL, THE HOMEVOTER HYPOTHESIS 40-42 (2001);
7. Wallace E. Oates, The Effects of Property Taxes and Local Spending on Property Values: An Empirical Study of Tax Capitalization and the Tiebout Hypothesis, 77 J. POL. ECON. 957, 960-70 (1969);
8. John Douglas Wilson, Theories of Tax Competition, 52 Nat'l Tax J. 269, 289 (1999).
9. Wallace E. Oates, Fiscal and Regulatory Competition: Theory and Evidence, 3 PERSPEKTIVEN DER WIRTSCHAFTSPOLITIK 377, 379-80 (2002).
10. Gerald E. Frug & David J. Barron, City Bound 75-92 (2008).
11. Id. at 23-30.
12. d. at 87.
13. Laurie Reynolds, Taxes, Fees, Assessments, Dues, and the "Get What You Pay For" Model of Local Government, 56 FLA. L. REV. 373, 425-30 (2004);
14. see also Emerson Coll. v. City of Boston, 462 N. E.2d 1098, 1100-02 (Mass. 1984).
15. See Clayton P. Gillette, Local Redistribution, Living Wage Ordinances, and Judicial Intervention, 101 Nw. U. L. REV. 1057, 1085-88 (2007).
16. FRUG & BARRON, supra note 8, at 77.
17. Iowa Const. art. III, § 38A;
18. Tenn. Const. art. XI, § 9.
19. Ill. Const. art VII, § 6 (e).
20. City & County of Denver v. Sweet, 329 P.2d 441, 447 (Colo. 1958).
21. Dale Krane, Platon N. Rigos & Melvin B. Hill Jr., Home Rule in America 4-6 (2001).
22. HCA-Healthone, LLC v. City of Lone Tree, 197 P.3d 236, 241-42 (Colo. App. 2008).
23. See Clayton P. Gillette & Thomas D. Hopkins, Federal User Fees: A Legal and Economic Analysis, 67 B. U. L. Rev. 795, 800 (1987).
24. See Jerome W. Milliman, Beneficiary Charges: Toward a Unified Theory, in Public Prices for Public Products 27, 33-35 (Selma J. Mushkin ed., 1972).
25. See Gillette & Hopkins, supra note 19, at 800-01.
26. See Krane et al., supra note 17, at 490 tbl. A15 (results not reported for six states).
27. Id.
28. See John M. Quigley, Urban Diversity and Economic Growth, 12 J. ECON. PERSP. 127, 136 (1998).
29. See Reynolds, supra note 11, at 374-75.
30. See WALLACE E. OATES, FISCAL FEDERALISM 131-40 (1972);
31. see also JOHN CULLIS & Philip Jones, Public Finance and Public Choice 303-05 (2d ed. 1998);
32. Paul E. Peterson, City Limits 182-83 (1981);
33. Paul E. Peterson, The Price of Federalism 27-28 (1995);
34. Richard A. Musgrave, Fiscal Federalism, in PUBLIC FINANCE AND PUBLIC CHOICE: Two CONTRASTING Visions of the State 155, 160-61 (James M. Buchanan & Richard A. Musgrave eds., 1999).
35. See infra text accompanying notes 31-34.
36. See generally Gillette, supra note 12 (discussing the distinction between beneficial and more malign uses of local redistribution).
37. See Peter D. Enrich, Saving the States from Themselves: Commerce Clause Constraints on State Tax Incentives for Business, 110 Harv. L. Rev. 377, 379-80 (1996).
38. David Wildasin, Interjurisdictional Capital Mobility: Fiscal Externality and a Corrective Subsidy, 25 J. Urb. ECON. 193, 194-96 (1989).
39. See Wilson, supra note 6, at 289.
40. See Edward L. Glaeser & Andrei Shleifer, The Curley Effect: The Economics of Shaping the Electorate, 21 J. L. ECON. & ORG. 1, 2 (2005).
41. See Edward L. Glaeser, CITIES, Agglomeration and Spatial Equilibrium 116 (2008);
42. David Schleicher, Why Are There Cities? Agglomeration and Sorting in Local Government Law (forthcoming) (manuscript at 3, on file with author).
43. See Jessica Trounstine, Political Monopolies in American Cities 148-61 (2008).
44. See generally Thomas Rorner & Howard Rosenthal, Bureaucrats Versus Voters: On the Political Economy of Resource Allocation by Direct Democracy, 93 Q. J. ECON. 563 (1979).
45. David N. Figlio & Arthur O'Sullivan, The Local Response to Tax Limitation Measures: Do Local Governments Manipulate Voters to Increase Revenues?, 44 J. L. & ECON. 233, 233-34 (2001).
46. Richard Briffault, The Disfavored Constitution: State Fiscal Limits and State Constitutional Law, 34 RUTGERS L. J. 907, 932 (2003);
47. see also Richard F. Dye & Therese J. McGuire, The Effect of Property Tax Limitation Measures on Local Government Fiscal Behavior, 66 J. PUB. ECON. 469 (1997).
48. Dye & McGuire, supra note 36, at 487.
49. Katharine L. Bradbury, Christopher J. Mayer & Karl E. Case, Property Tax Limits, Local Fiscal Behavior, and Property Values: Evidence from Massachusetts Under Proposition 2 1/2, 80 J. PUB. ECON. 287, 309 (2001).
50. Jacob L. Vigdor, Other People's Taxes: Nonresident Voters and Statewide Limitation of Local Government, 47 J. L. & ECON. 453, 472 (2004).
51. Andrew Haughwout, Robert Inman, Steven Craig & Thomas Luce, Local Revenue Hills: Evidence from Four U. S. Cities, 86 Rev. ECON. & STAT. 570, 582-83 (2004).
52. See, e.g., Bd. of Educ. of Me. Twp. High Sch. Dist. 207 v. State Bd. of Educ, 487 N. E.2d 1053, 1055-57 (Ill. App. Ct 1985).
53. For analysis and critique of the differences between use value and exchange value, see John R. Logan & Harvey L. Molotch, Urban Fortunes 41-42, 103-11 (1987).
54. Note, however, that my argument about the disutility of tax limitations applies to localities more than to the state. Because I rely on the market for residence, and that market is thicker among localities than it is among states, I venture no view about whether tax limitations on states should similarly be relaxed.
55. See Robert S. Amdursky & Clayton P. Gillette, Municipal Debt Finance law 171-74 (1992).
56. See Alberta M. Sbragia, Debt Wish: Entrepreneurial Cities, U. S. Federalism, and Economic Development 44-59, 80-85 (1996).
57. See, e.g., Robertson v. Zimmerman, 196 N. E. 740, 744-45 (N. Y. 1935).
58. See Lonegan v. State, 819 A.2d 395, 397 (N. J. 2003);
59. Colleton County Taxpayers Ass'n v. Sch. Dist. of Colleton County, 638 S. E.2d 685, 689-90 (S. C. 2006);
60. AMDURSKY & GILLETTE, supra note 44, at 214-19;
61. Briffault, supra note 36, at 920-25.
62. See, e.g., Denver Urban Renewal Auth. v. Byrne, 618 P.2d 1374, 1382 (Colo. 1980).
63. But see Okla. City Urban Renewal Auth. v. Med. Tech. & Research Auth. of Okla., 4 P.3d 677, 679-80 (Okla. 2000).
64. See, e.g., Gould v. Barton, 181 S. E.2d 662, 669-70 (S. C. 1971). For findings that overlapping jurisdictions increase the size of the local public sector, see Christopher Berry, Piling on: Multilevel Government and the Fiscal Common-Pool, 52 AM. J. POL. SCI. 802, 802 (2008).
65. See Chem. Bank v. Wash. Pub. Power Supply Sys., 666 P.2d 329, 331, 342-43 (Wash. 1983), cert. denied, 471 U. S. 1075 (1985). The invalidation of the contracts in Chemical Bank caused default on bonds of the Washington Public Power Supply System. Id. at 331.
66. For example, an initial inquiry into New York City's fiscal state reveals that the city has in excess of $35 billion in long-term indebtedness. See Bond Official Statement Archive, City of New York, $308, 000, 000 General Obugation Bonds, Fiscal 2009 Series G, at 54 (2008), http://nycbonds.org/NYC/pdf/2009/NYC-2009-G.pdf. Only further examination reveals that the figure does not include a significant amount of debt for which the City is not nominally responsible, but which is payable from revenues that otherwise would have been available to the City. For instance, the figure does not include the debt of the Transitional Finance Authority. That authority has issued $13.5 billion of debt secured by New York City personal income tax and sales tax revenues. Id. at 56. The City also has entered into agreements to pay the indebtedness of other governmental issuers, the proceeds of which benefit the City. Those agreements fall outside the debt limit of the City because they are "subject to appropriation." Id. at 53.
67. S. D. CONST, art XIII, § 4.
68. GA. CONST. art. IX, § 5, ¶ I (a).
69. ARK. CONST. amend. 62, § 1 (b).
70. Id.
71. ALA. CONST. art. XII, §§ 222, 225.
72. Wash. Const. art. VIII, § 6.
73. W. Va. Const. art. X, § 8.
74. IDAHO CONST. art. VIII, § 3 (regarding water, sewer, or electrical system bonds).
75. Tex. Const. art. III, § 52 (b) (regarding improvement of rivers, irrigation, drainage, and roads).
76. The Government Finance Officers Association promulgates generally accepted accounting practices and standards for governmental accounting, auditing, and financial reporting.
77. See, e.g., Stephen J. Gauthier, Gov't Fin. Officers Ass'n, 2005 Governmental Accounting, Auditing, and Financial Reporting (8th ed. 2005).
78. D. Roderick Kiewiet & Kristin Szakaly, Constitutional Limitations on Borrowing: An Analysis of State Bonded Indebtedness, 12 J. L. ECON. & ORG. 62, 66 (1996).
79. See Tamim Bayoumi, Morris Goldstein & Geoffrey Woglom, Do Credit Markets Discipline Sovereign Borrowers? Evidence from U. S. States, 27 J. MONEY CREDIT & BANKING 1046, 1057 (1995).
80. Id.
81. Id.
82. See, e.g., U. S. Trust Co. of N. Y. v. New Jersey, 431 U. S. 1, 9 (1977).
83. Clayton P. Gillette, Can Public Debt Enhance Democracy?, 50 Wm. & Mary L. Rev. 937, 942 (2008);
84. see Douglas G. Baird & Robert K. Rasmussen, Private Debt and the Missing Lever of Corporate Governance, 154 U. Pa. L. Rev. 1209, 1213 (2006).