LOSTs in Translation: Yardstick Competition among Florida Counties by S. Larson
Political yardstick competition holds that the fiscal policy decisions within one jurisdiction will be related to the policy decisions of neighboring jurisdictions; the degree to which the interaction between neighboring jurisdictions will occur is based on how sensitive or insensitive the executive is to neighbor jurisdictional changes (Besley & Case, 1995). Local option sales taxation is the second largest revenue source for municipalities throughout the United States. However, the effects of this completion on county local option sales taxes has not been addressed significantly by the research yet to date. Through a spatial analysis of the local option sales tax rates and revenue collections of four different local option sales taxes (Local Government Infrastructure Surtax, Small County Surtax, School Capital Outlay Surtax, and Local Option Tourist Development Surtax) in Florida between 1977 and 2015, this research highlights the rise and fall of yardstick competition among Florida counties for Local Option Tourist Development rates and revenues. The strategic behaviors of Florida counties over the tenure of the various local option sales taxes highlights counties desires to maximize the potential revenue collections in the case of high tax exportation, as well as the ability to use the taxation as a means of revenue diversification.
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