Abstract
New England depends less on user charges for its state and local revenues than any other area in the US. Consequently, policymakers maintain that increases in user charges would correct an imbalance in the area's revenue mix. However, the national mix of state and local revenues is not necessarily the optimal mix for the New England states. The degree to which a state should rely on user charges is dependent on the priorities of its policymakers among competing principles of taxation, the conditions under which each principle favors user charges over taxes, and the extent to which these conditions exist within the state. Conditions peculiar to New England partially explain and justify the relatively small role user charges play in the region's revenue mix. The principles of efficiency and benefit taxation suggest that increases in user charges should be confined to primarily private services, such as electric power, water supply, and hospital care.