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Fiscal Disparity

A fiscal disparity is an enduring mismatch between necessary expenditures and a government’s capacity to raise sufficient revenue. A needs-resources discrepancy emerges when economic and societal conditions that call for public spending are not consistent with circumstances that support resource acquisition. The resulting gap may be either positive or negative. A positive disparity occurs when a government’s ability to pay exceeds expenses. For example, revenues tend to be plentiful in a community in which income, employment levels, and property values are high. At the same time, prosperity reduces the prevalence of societal problems and eases expenditure demands. The resulting fiscal advantage permits budget increases for schools and amenities, and acceptable tax burdens. A negative disparity exists when obtainable financing falls short of spending requirements. For ...

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