All Is Not LOST in Texas? An Outcome-Oriented Analysis of Local Option Sales Tax Choices on Measures of Economic Growth. Issue 1 (2nd January 2022)

• Record Type: Journal Article
• Authors: Kanaan, David Z.; Hall, Jeremy L.; Qin, Huan
• Is Part Of: Public performance & management review. Volume 45:Issue 1(2022)
• Page Start: 163
• Page End: 197
• Publication Date: 2022-01-02
• Subjects: County-level nesting effect -- economic development -- local option sales tax -- LOST -- local capacity -- municipal-level economic development corporation -- municipal-level economic development outcomes -- outcome-oriented analysis -- performance management -- performance measurement -- performance outcomes -- Texas 4a EDC -- Texas 4b EDC; Civil service -- Labor productivity -- Periodicals; Civil service -- Labor productivity -- United States -- Periodicals; Government productivity -- Periodicals; Government productivity -- United States -- Periodicals; Public administration -- Periodicals; Public administration -- United States -- Periodicals; Civil service -- Labor productivity; Government productivity; Public administration; United States; Periodicals; 351.05
• DOI: 10.1080/15309576.2021.1955218
• Languages: English
• ISSNs: 1530-9576

Abstract

Abstract: Are municipal-level local option sales taxes (LOST) in Texas associated with long-term economic development outcomes? The Texas 4a and 4b LOST options fund economic development projects managed by a dedicated municipal-level economic development corporation (EDC). Instead of short-term outputs, we consider associations with three primary long-range outcomes: property value growth, population growth, and new home construction. Three regression analyses examine economic growth between 2011 and 2015 for Texas municipalities while controlling for county-level nesting effect, local capacity, and other contextual factors. The implementation of the 4a industrial development LOST shows a small significant positive association with population growth, albeit at the .10 level. The 4a LOST is also selected as part of the optimal model for property value growth despite not being significant. Implementation of the broader 4b community development LOST is not found significant nor included in any of the three outcome-based models. In each case, the county-level nesting effect is highly associated with economic development outcomes, while municipal-level capacity measures, such as property tax collected per capita, household median income, and the percentage of 4-year college graduates also show strong associations. Municipalities more dependent on the manufacturing sector show a significant negative association with all three economic development outcomes.