University of Wisconsin-Madison Professor Emeritus of Public Affairs and Applied Economics Andrew Reschovsky will present for the Seminar Series.
About Andrew Reschovsky
Andrew Reschovsky is Professor Emeritus of Public Affairs and Applied Economics at the University of Wisconsin-Madison. He has published widely on topics related to state and local government finance. He is currently conducting research on the impact of changes in remote work on the fiscal health of U.S. central cities, on the design of school funding formulas to assure an equitable and adequate education for all students and on tax autonomy in OECD countries. He has served as an advisor to the South African Financial and Fiscal Commission and the Organization of Economic Cooperation and Development in Paris. In 2011, he was awarded the Steven D. Gold Award by the Association of Public Policy Analysis and Management in recognition of his contributions to state and local fiscal policy. He earned a Ph.D. in economics from the University of Pennsylvania.
About the presentation
Dr. Reschovsky assesses the long-run impact of the COVID-19 induced increase in remote work (working from home, WFH) on the fiscal health of America’s central cities. His analysis is based on data from a specially constructed fiscally standardized cities (FiSC) database that accounts for the revenues and spending of all the governments that provide public services to city residents and businesses. Increased prevalence of WFH reduces demand for office space, putting downward pressure on the commercial-industrial portion of cities’ property tax bases. Some analysts have predicted that falling property tax revenues will lead to cuts in spending, which in turn will result in the flight of residents and businesses and further revenue declines creating an “urban doom loop.” Based on survey data on remote work and census data on employment and wages by industry, he finds that on average property bases will decline by 8.4 percent in the 135 cities in his sample. However, because cities also rely on other taxes, user fees, and intergovernmental grants, the overall revenue-raising capacity of cities will decline by 2.9 percent, an order of magnitude that is unlikely to lead to doom loops. His analysis identifies a handful of cities that will face large impacts from increases in remote work and were in relatively weak fiscal health prior to the pandemic. Unless offset by targeted increases in state aid, these cities face the prospect of substantial increases in tax rates and/or cuts in public services.
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Organizer
La Follette School of Public Affairs,
Contact
Mindy Walker, mindy.walker@wisc.edu
