Impact of Property Taxes

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    IMPLAN Support
    Hi Archie, If you are trying to look at the impacts of taxes on state and local governments you would want to run those through the appropriate institutional spending pattern. Sector 432 represents a certain sub-set of special government activities that behave like regular businesses rather than like institutions in their operations (they have to generate production and sales to maintain operations, rather than operating exclusively from taxes). “Other” government enterprises (i.e., those other than postal, electric utility, and transportation services) include things such as government-owned and operated liquor stores, airports, sewer and sanitation services, gas and water supply, and post exchange. In regards to selecting an institution spending pattern, you’ll most likely want to use the State&Local Government non-ed spending pattern, unless you happen to know that sales taxes are funneled into a specific program. http://implan.com/v4/index.php?option=com_multicategories&view=categories&cid=251:institutionalspendingpatterns&Itemid=71. If you need additional assistance importing and running an institutional spending pattern, please let us know. Thanks.
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    flanders
    I have imported the institutional sector State/Local Govt. NonEducation. Where do I enter the dollar amount? I don't see any box for the amount of $3,270,000.
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    IMPLAN Support
    You will enter the dollar amount in as the Activity Level. To do this you will click the Edit Activity button and then change the level value from 1.00 to $3,270,000 When you run the analysis, this will show you the full value of how the taxes paid are spent by this program, but note that the results will not include the original $3.2MM you have spent. Sector 437 will show the employment, and Labor Income values for the state and local government non-ed, while the remaining 'direct' employment, income and output values will be part of your indirect impact. The proper direct output value will be your total tax dollar investments. Please let us know if you have any additional questions.
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    flanders
    I understand most of the results. I enter $3,270,000 as state/local noneducational spending. In sector 437 the results are 25 employment and $1,075,719 labor income. Sector 437 has $1,225,530 of direct output and no indirect or induced output. Total direct output for all sectors is only $2,299,400. What is the interpretation of direct output in 437? Is it in addition to, or part of the original $3,270,000? Sector 437 is named employment and payroll only. Why is there any amount at all in direct output for 437?
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    IMPLAN Support
    Hi Archie, Sector 437 is confusing.. This sector represents the payroll, employment and value added for the state and local government itself, and since no industries purchase state and local government and payroll, there are never any indirect or induced impacts associated to this. These report direct effects, because they are an event line in the Activity you imported. However, unlike the other budgetary items that are included in the ‘direct effect’, these results are actually representative of the activity of the government itself rather than the purchases the government makes. So you will want to subtract the values in Sector 437 from the ‘direct impacts’ and report these as the employment, labor income and Value Added (these two elements should be the same value) that is occurring in the government as associated to these tax values. Your total direct output then becomes the $3,270,000 your original invested taxes. You can then sum the remaining ‘direct’ impacts from the analysis into your indirect line and then add the impacts at the government level as you direct, if you want to report in the form of the standard summary table, or you can storyboard your impact by talking about, the amount of government employment and income that are supported by your taxes dollars, the impacts of the governments local purchases and the remaining impacts. Let us know if you have more questions.
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    flanders
    Please try another explanation. Example: ... labor income and Value Added (these two elements should be the same value)... My results have in 437 direct labor income of $1,075,719 and VA of $1,192,363. LI is not the same as VA in 437. Does your explanation mean that I can ignore the reported direct output in 437 and use the original $3,270,000 as total direct output? Is the reported direct output in other sectors actually the first round of indirect output? Is the reported direct employment, LI, and VA in other sectors actually the first round of indirect measures? I do not understand any of the section that begins with You can then sum the remaining ......
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    IMPLAN Support
    Hi Archie, We apologize the confusion on "... labor income and Value Added (these two elements should be the same value)". If this is not the case in your model, then you will want to adjust the study area data so that Output is equal to Employee Compensation for Sector 437 and then rebuild you model, and rerun your Scenario. This allows you to capture thee leakage due to depreciation which is not a budget item but rather a bookkeeping item for calculation of GDP. Yes, you will override the Output value for this Event with your Output (sales tax) value, because this Value Added factor is already included in your sales dollars. So your Direct Effect line would read: Employment Labor Income Value Added Output Direct (437's) $1,075,719 $1,192,363 $3,270,000 You are absolutely correct. The remaining reported 'direct' output, labor income, value added and employment are all the first round indirect impacts. In regards to the remaining information, it is simply indicating that because the remaining values listed as direct effects are actually the first round indirect impacts, you can if you want to, sum these into the remaining indirect impacts so that you have an institutional impact that looks like a standard industry impact. However, often with analysis-by-parts for both industries and institutions we recommend discussing the impacts without using the terminology (direct, indirect, induced) etc. So instead of summing these things together you can talk about these impacts in regards to what they mean. These tax dollars support X state and local government jobs and their payroll of around one million dollars. In addition to this the state and local government purchase X dollars (the remaining total of the first round indirect impacts) from the local sources generating X jobs in various local industries. This in turn contributes to X additional production (the total reported as indirect), jobs, and income. Etc... Hope this helps, and we apologize for both the mistake and the lack of clarity.
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