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local government, revenues, taxation, public services


Citizen dissatisfaction with taxes is a theme which has recurred often in American history--from the Tea Party at Boston to Proposition 13 in California. As before, tax dissatisfaction in its current form is prompting changes in: the level of government expenditures; the mix of revenue sources used to finance expenditures; and the structure of institutions created to provide public services. Much of the local tax reform effort is focused on state and local finance systems and especially on the real property tax. Citizen participation in reform efforts is an example of democracy in action. Yet, the quality of reforms achieved will depend upon how knowledgeable the reformers are. Frustration and anger will result if tax reforms create unexpected and undesired consequences. This paper is designed to provide an overview of state and local government revenue options for citizens and public officials. The information is designed to assist in decisions concerning what mix of revenues state and local governments can use and the likely consequences of their revenue choices. Some tests or criteria for choosing among revenue options are defined. Various revenue options are then identified and the criteria are applied to those options.


Department of Economics, South Dakota State University

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