The impact of tax and expenditure limitations on user fees and charges in local government finance: Evidence from New England

Pengju Zhang, Yilin Hou

Research output: Contribution to journalArticlepeer-review

Abstract

American local government financing shifted fromtaxation toward user fees and charges (UFCs) in the late1970s, with substantial efficiency and equity implications. Normatively, the shift aligns with the benefit principle; positively, the shift is often attributed to tax revolts. We test the two associations via a difference-In-differences design and a fiscal stringency measure of tax and expenditure limitations (TELs); we also test the moderating effects of overrides on TELs. Our results confirm that state-Imposed TELs caused the shift in local public finance; the results are robust to change of sample and empirical strategy. This article helps explain the relationship between tax revolts and non-tax revenue and provides evidence that fiscal constraints imposed by a higher level government on a constituent level can have significant effects, Including effects beyond the intent of the constraints' framers.

Original languageEnglish (US)
Pages (from-to)81-108
Number of pages28
JournalPublius
Volume50
Issue number1
DOIs
StatePublished - Dec 1 2020

ASJC Scopus subject areas

  • Sociology and Political Science
  • Public Administration

Fingerprint Dive into the research topics of 'The impact of tax and expenditure limitations on user fees and charges in local government finance: Evidence from New England'. Together they form a unique fingerprint.

Cite this