Title

If You Build It, Will They Come?: Fiscal Federalism, Local Provision of Public Tourist Amenities, and the Vision Iowa Fund

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2013

Journal or Book Title

The Review of Regional Studies

Volume

43

Issue

2

First Page or Article ID Number

155

Last Page

173

Abstract

Iowa provided partial state funding to communities to build tourist attractions, a potential solution to local under-provision of public goods. A 10 percent increase in state funds increased county taxable retail sales by 0.1 percent. The State’s return from resulting sales tax revenue averaged 11.8 percent. Local communities paid more and received less tax, and so their return was much smaller at 1.2 percent. Neighboring community sales also increased. The positive spillovers to neighbors and the state suggest that local communities will undersupply public amenities without state subsidies.

Comments

This is a manuscript of an article from Review of Regional Studies, Vol. 43 no. 2,3 (Winter 2013): 155.