Online commerce presents consumers with a convenient way of shopping outside of their local jurisdiction, and this online purchase decision is capable of affecting in significant ways the sales and use tax collections of state governments. However, the actual revenue impact has proven difficult to estimate. There is considerable work that examines the revenue impact of seller compliance with sales taxes. However, there is little work on buyer compliance with use taxes. In this paper, we investigate the potential impact of cross-border shopping on state use tax liabilities of buyers, using data from the largest online consumer-to-consumer and business-to-consumer marketplace, eBay.com. We collect our own data on actual cross-border shopping transactions from eBay, focusing upon a “representative” commodity classification and a “typical” day; these data consist of nearly 21,000 eBay listings generated by roughly 7,000 individual sellers with over 9,000 buyers. These data allow us to examine the extent of actual, not estimated, cross-border shopping by buyers, and the subsequent potential impact of this cross-border shopping on state use tax liabilities. Our results indicate that cross-border shopping is highly prevalent on eBay, with out-of-state purchases accounting for on average 94 percent of the volume of a state's purchase transactions. Even so, given the limited volume of eBay-based transactions relative to total sales transactions, the likely impact of cross-border transactions on state use tax revenue streams is quite low, at least at present, typically less than one percent of actual state sales tax revenues.

Faced with existing revenues sources that are insufficient to finance highway maintenance and construction needs, some state and local governments are using or considering highway public–private partnerships. These partnerships may be attractive as a way for a government to obtain upfront revenues from the long-term lease of a road and to shift some of the construction and operations risks to a private firm. However, with these benefits, comes the need to preserve the public interest. This paper discusses issues related to preserving the public interest in highway public–private partnerships and presents a case study of the State of Texas. The case study focuses on an analysis of the strengths and limitations of Texas’ policies and procedures to protect the public interest in the use of long-term leases for the financing, construction, and operation of new toll roads. The case study also discusses what other governments may be able to learn from Texas’ experiences.

As public resources become scarcer, private donations for capital projects and public services may become increasingly important. Modern donors, using the new philanthropy philosophy common now in the nonprofit sector, may desire more control over the use of their funding than in the past. This research examines the effects of private donations on capital decision making, and explores the balancing act required by public officials between best practices and private norms in this process. The study uses the city of Omaha, Nebraska case, where corporate and individual donors have made significant financial contributions for the construction of a convention center/arena and a baseball stadium. Findings include both costs and benefits of this approach, and may be beneficial for theory-building related to this relatively unexplored topic, as well as for practitioners faced with similar needs and demands.

Now that state governments issue comprehensive annual financial reports in accordance with Statement No. 34 of the Governmental Accounting Standards Board, it is possible to generate a consistent and comprehensive set of government-wide financial information. We use the information to develop financial ratios to benchmark government financial performance from information beyond the traditional general fund, and test the hypothesis that such information is incorporated into the assessment of credit risk. We provide an empirical analysis of the incorporation of government-wide financial information into state government credit ratings, which provides a positive empirical test of the theory of certification and demonstrates how information from the government-wide financial statements is infused into financial markets.

The credit crisis that roiled the financial and housing markets in late 2007 and early 2008 resulted in well-publicized budget challenges for state and local governments. Less visible has been a dramatic change in the bond insurance market, which alters how governments issue long-term debt. Debt issuance data from Texas are used to model bond insurance premiums and examine utilization following the crisis. The results provide evidence that insurance premiums rose dramatically following the fiscal crisis, even when controlling for widening credit spreads and changes in the underlying credit quality of issuers.

This article explores the question of whether bond insurers are able to sufficiently evaluate the credit risk of insured bonds, the answer to which would determine the future of municipal bond insurance. A sample of insured municipal bonds is investigated to determine whether bond insurance premia can predict the future credit rating transition, the proxy for bond credit risk. The results show that municipal bond insurance premia, conditional on bond credit ratings and other explanatory variables, have explanatory power over credit rating downgrades but not over upgrades. As such, bond insurance premia convey extra information about the underlying credit risk of a bond issue than the original credit rating reveals. This research also provides evidence that the rating agencies might not be doing as a good job as they could potentially do.