Rationality, accountability reform and accounting for land under roads in an australian local governmentHoque, Zahirul
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B001
Recently the inclusion of land under roads as an asset in financial reports by Australian local governments has led to several concerns arising from dissatisfaction with certain elements of the new accounting standards and concepts, particularly, the Australian Accounting Standard AAS 27 “Financial Reporting by Local Governments” and the Standard Accounting Concepts SAC 4 “Definition and Recognition of the Elements of Financial Statements.” These concerns have also meant that most local governments are opposing the recognition of land under roads as an asset for financial reporting purposes. With the inclusion of land under roads dominating the asset element of financial reports, the relevance and reliability of valuation of land under roads needs to be examined. Using an Australian case, this paper examines whether this information provides greater relevance and reliability to users. The paper suggests that, as lands under roads do not affect the Council’s economic position and this information has no value to the users of the information, there is no point in increasing the council’s financial reporting costs.
China's fiscal reform: the issue of extra budgetingHolzer, Marc; Zhang, Mengzhong
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B002
To adjust the fiscal relationship between the central government and the local government, especially to increase the two ratios of (1) central fiscal revenue over GDP and (2) central fiscal revenue over government revenue, China conducted a 1994 fiscal reform effort, the result of which is, at best, mixed. One of the failures to boost the first ratio is the existence of largescale extra budget funds (EBFs) and extra-extra budgetary funds (EEBFs). This paper explores the history, the problems and the causal relations associated with the EBFs under the broad background of China’s fiscal reform and administrative reform. This paper then proposes a comprehensive package for the solution of problems related to the EBFs.
State and local fiscal structures and fiscal stressShamsub, Hannarong; Akoto, Joseph B.
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B003
In the past two decades, much of the literature in the area of government financial management has been devoted to studying the causes of fiscal stress. Most studies emphasized the role of such factors as economic cycles, business relocation and factors beyond the control of policy makers as major causes of fiscal stress. This study extends the scope of the research in this area to investigate whether state and local fiscal structures contribute to fiscal stress. Using a pooled cross-sectional time-series approach with the state-local data ranging from 1982 to 1997, the result shows that: there is more significant difference in the composition of tax structures than that of total revenue; high aggregate spending is associated with high fiscal stress; state and local governments over-commit on the social welfare category; local revenue diversification is associated with low fiscal stress; and fiscal decentralization or high spending responsibility assumed by local governments is associated with low fiscal stress. The findings suggest that local revenue diversification and fiscal decentralization can be used as measures to reduce fiscal stress.
The prospects for general sales taxation in american state and local government finance: challenges for a fiscal workhorse unready for the new millenniumMikesell, John L.
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B005
The retail sales tax has provided a strong foundation for American state government finance since its beginnings in the Great Depression. However, its position as a productive, reliable, and administrable revenue source is now under challenge from three forces. First, it continues as a tax primarily on purchases of tangible personal property, despite the shift in consumption toward services. Second, the physical presence rule for taxation of sales by remote vendors creates an intolerable imbalance between local and remote sellers. And third, legislatures keep gnawing away at the base with politically attractive but fiscally unjustifiable exemptions. In total, the position of the sales tax as a viable and defensible revenue alternative is at risk.
Factors leading to state participation in the streamlined sales tax projectCameron, Amna C.
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B006
The loss in sales tax revenue from nontaxable remote sales erodes a state’s ability to fund essential programs. Taxable goods sold via the Internet in 1999 created a loss to state and local governments of $525 million in sales tax revenue. This study examines the effects of five variables on a state’s willingness to participate voluntarily in the Streamlined Sales Tax Project (SSTP). Three hypotheses are supported: 1) the higher the grade on the Business Vitality score, the more likely elected officials will be influenced by the private sector and state economic development personnel not to participate in the SSTP; 2) the higher the index of innovation capacity, the more likely elected officials will be influenced by businesses not to participate; and 3) the greater the reliance on sales tax, the more likely a state will participate.
Changes in state tax structures: true comprehensive reform or artifacts of incrementalism?Wolfson, Gabriela S.; Hackbart, Merl M.
2004 Journal of Public Budgeting, Accounting & Financial Management
doi: 10.1108/JPBAFM-16-01-2004-B007
Using data obtained from the National Conference of State Legislatures (NCSL), we investigate modifications in state tax codes to determine their characteristics, the apparent trends of state tax reform, and whether changes constituted comprehensive reform or mere incremental adjustments to existing tax structures. Based on the data, we find that few states achieved comprehensive tax reform in the 1990s despite the fiscal surplus that provided an environment conducive to widespread change. Moreover, we find that a significant number of changes that were enacted in the 1990s involved increases or decreases in state tax revenue that were ultimately tied to economic cycles. We suggest that adequacy in state tax collections may be the most common tax principle adhered to with regard to changes in tax structure. We also conclude that reform efforts in the 1990s were most successful when approached in an incremental fashion in the absence of a significant precipitating reform driver.