Working Paper

Measuring disparities in non-school costs and revenue capacity among Massachusetts cities and towns

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. ; Also issued as New England Public Policy Center Working Paper 06-3

Keywords: Local finance - Massachusetts; Property tax - Massachusetts; Cities and towns - Massachusetts;

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Working Papers

Publication Date: 2007

Number: 06-19