Several financial and distributional implications of municipal electric profits are examined for cities in North Carolina. Profits are found to reduce own-revenue collections. After controlling for per capita income and population, per capita own-revenues in cities with public electric companies are observed to be 25% to 45% lower than in other cities. Substantial exporting to nonresidents is also indicated; the median rate of exporting is estimated to be approximately 10%. Finally, the impact on general revenue sharing entitlements for all types of local governments is analyzed when profits are included in tax effort.
No takes yet. Share an insight, caveat, or question.
Strauss et al. (1976) studied this question.