Over the past few weeks the conversation about sales tax has been pretty consistent and fairly intense. That is probably as it should be given the overall importance of revenue generation across the state right now. What have I done so far? I think the best thing to date may be the discussion surrounding the rolling twelve month series used by the city. Rather than accuracy it is more about stability. Eleven of twelve months in the series are the same from one month to the next so of course the series is stable. The flaws of this approach can be seen when you look at the recent decline. A good month is totally outweighed by the totality of the previous eleven. It also begs a statistical question: should all these months be given equal weight while in the series and then just disappear? That seems highly suspect.
Sports unions are a bit of a quandary. In part I think it has to do with the widespread differences in talent and therefore earnings potential within the union membership.
Recent posts clearly place me in the camp of “critic” for the sales tax data from Grand Forks. Criticism can be important because it encourages us to make things better, to improve upon the inadequate. With that in mind I offer up some alternatives that might be better than the current system. If we need to remove some of the “ups-and-downs” of the data, for whatever reason, let’s try to keep the some of the features of the data that keep us in the realm of informing policy. This first graph is for a long period of time and may be a bit difficult to see.
Last week I argued (here) that the city’s use of the rolling twelve month total was not really about accuracy as much as stability. Essentially the two concepts are conflated in the presentation. I still fail to see the virtues of knowing the total sales over the last twelve months, and how it better informs policy decisions. I present the following graphs to demonstrate my points about stability. Here is the monthly collection amount (recall there is approximately a two month lag between sales tax collections and the reported amount).
I used the same data that I used for the map yesterday but plotted the ratio against median total earnings. Partly this was to see if there is a pattern to discern in North Dakota counties such as higher median earnings leading to an increasing or decreasing parity ratio. To assist in this examination, I added a linear regression line and a confidence interval and this is what I found.