'Are Nonresidents Contributing Their Share to Core City Revenues?': A Comment.

The article focuses on the contribution of nonresidents' share to core city revenues. In one of his articles, professor R.S. Smith raises the question whether nonresidents contribute their share to core city revenues and concluded that in the case of San Francisco metropolitan area at least, the evidence suggests that nonresidents contribute more to the tax coffers of the core city than they receive in public expenditure benefits. Smith introduces an interesting methodology to study the question. First, he divides public expenditures by the core city into those that benefit business and those that do not benefit business. Of expenditures benefiting business, Smith then estimates the amount benefiting nonresidents and so derives an estimate of nonresident benefits from core city business taxes collected from nonresidents. The difference between estimates of nonresident benefits and tax payments is the measure Smith uses to determine whether nonresidents are paying their share of San Francisco's taxes. It is not entirely clear what criterion Smith uses in allocating core city public expenditures between the business and nonbusiness sectors.