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PUBLIC SECTOR MAINTENANCE: THE CASE OF LOCAL MASS-TRANSIT
BRIAN A. CROMWELL
National Tax Journal
Vol. 44, No. 2 (June, 1991), pp. 199-212
Published by: National Tax Association
Stable URL: http://www.jstor.org/stable/41788891
Page Count: 14
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This paper explores maintenance practices in the local public sector and their relationship to state and federal grant policies. If state and federal grant policies induce local governments to substitute new investment for the maintenance of existing capital, excessive deterioration of public infrastructure may result. Using a new data set on the maintenance policies of local mass-transit providers, it shows that private owners of transit capital equipment devote significantly greater resources to maintenance than do public owners of similar capital. The results support the position that publicly-owned capital deteriorates faster than similar private capital, but are unable to distinguish the price effect of capital subsidies from institutional features of private ownership.
National Tax Journal © 1991 National Tax Association