Monday, March 9, 2009

transparency and user fees

In this week's reading "The Changing Picture of Minnesota Finance," Rebecca Otto states, "Regressive taxes and fees are also less efficient means of generating revenue - and much less transparent."

Is this really true? The Fisher text states, "user charges are most appropriate when ...the benefits of a government service go to identifiable direct consumers...." (p. 185). It seems that the point of a user fee is that consumers are aware of the service they are getting for the fee. Maybe that is not always the case, but to use one of the examples the book uses - it is obvious that you are paying to use a municipal golf course so that the service can be maintained. It seems pretty transparent to me. Are there other issues I'm not thinking of?

1 comment:

  1. Good questions. Is it true? If someone wanted to hide a fee they could do so, and have done so in the past, I am thinking banking. Although when an organization is more transparent one of the first things I notice is an increase in fees, even on things such as my utilities bill, the changes really stand out.