This article investigates local governments’ spending of accommodations tax revenues in the state of South Carolina. Although these revenues are partially earmarked for tourism promotion, results show that local governments engage in illegal fiscal substitution. This fiscal substitution can be explained by the local government's financial flexibility and the proportion of accommodations taxes relative to its overall budget.
Bos, Dieter. 2000. Earmarked taxation: Welfare versus political support. Journal of Public Economics753:439-465.
2.
Browning, Edgar K.1975. Collective choice and general fund financing. Journal of Political Economy832:377-390.
3.
Buchanan, James M.1963. The economics of earmarked taxes. Journal of Political Economy715:457-469.
4.
Dee, Thomas S.2004. Lotteries, litigation and education finance. Southern Economic Journal703:584-599.
5.
Dhillon, Amrita, and Carlo Perroni. 2001. Tax earmarking and grass-roots accountability. Economics Letters72:99-106.
6.
Gamkhar, Shama. 2003. The role of federal budget and trust fund institutions in measuring the effect of federal highway grants on state and local government highway expenditure. Public Budgeting and Finance231:1-21.
7.
Government Finance Officers Association (GFOA). 2002. Appropriate level of unreserved fund balance in the general fund, GFOA recommended practice issued by Committee on Accounting, Auditing, and Financial Reporting. http://www.gfoa.org/services/rp/caafr/caafr-appropriate-level.pdf.
8.
Gramlich, Edward M.1997. Intergovernmental grants: A review of the empirical literature. In Financing federal systems: The selected essays of Edward M. Gramlich, 106-126. Northampton, MA: Elgar.
9.
Hay, Leon E., and John H. Engstrom. 1996. Essentials of accounting for governmental and notfor-profit organizations. Chicago: Irwin.
10.
Hiemstra, Stephen J., and Joseph A. Ismail. 1992. Analysis of room taxes levied on the lodging industry. Journal of Travel Research311:42-50.
11.
Hay, Leon E., and John H. Engstrom. 1993. Incidence of the impact of room taxes on the lodging industry. Journal of Travel Research31 (4): 22-26.
12.
Hines, James R., and Richard H. Thaler. 1995. The flypaper effect. Journal of Economic Perspectives94:217-226.
13.
International City/County Management Association (ICMA). 1994. Evaluating financial condition: A handbook for local government. Washington, DC: ICMA.
14.
Land, Vance Q., and Majeed H. Alsikafi. 1999. A lottery's impact on instructional and noninstructional expenditures and unrestricted revenues for education. Journal of Education Finance252:149-174.
15.
Lauth, Thomas P., and Mark D. Robbins. 2002. The Georgia lottery and state appropriations for education: Substitution or additional funding?Public Budgeting and Finance223:89-100.
16.
Lee, D. R., and R. E. Wagner. 1991. The political economy of tax earmarking. In Charging for government, ed. R. E. Wagner, 110-124. New York: Routledge.
17.
Mak, James. 1988. Taxing hotel room rentals in the U.S. Journal of Travel Research271:10-15.
18.
Mead, Dean M.2000. What you should know about your local government's finances: A guide to financial statements. Norwalk, CT: Government Accounting Standards Board.
Rivlin, Alice M.1989. The continuing search for a popular tax. American Economic Review792:113-117.
21.
Spengler, J., and M. Uysal. 1989. Considerations in the hotel taxation process. International Journal of Hospitality Management84:309-316.
22.
Spindler, Charles J.1995. The lottery and education: Robbing Peter to pay Paul?Public Budgeting and Finance153:54-62.
23.
Styles, Alan K., Stephen W. Litvin, John C. Crotts, and Calvin Blackwell. 2003. Local government use of state accommodations tax revenues. Journal of Hospitality and Tourism12:111-118.
24.
Wilkinson, Margaret. 1994. Paying for public spending: Is there a role for earmarked taxes?Fiscal Studies154:119-135.
