TY - JOUR
T1 - The impact of tax and expenditure limitations on user fees and charges in local government finance
T2 - Evidence from New England
AU - Zhang, Pengju
AU - Hou, Yilin
N1 - Funding Information:
The authors express sincere thanks to the anonymous reviewers whose suggestions help us refine the article. We are also grateful for the valuable comments we received from John G. Matsusaka, Rebecca Hendrick, and Kenneth Kriz. We are particularly thankful to editor of this journal, Dr John Dinan whose fine touches on the final text add to the punch of our ideas. Remaining errors are the sole responsibility of the authors. Y.H. is supported on this study by the Tenth Decade Faculty Scholar Fund at the Maxwell School of Citizenship and Public Affairs, Syracuse University.
Publisher Copyright:
© 2019 The Author(s).
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/12/1
Y1 - 2020/12/1
N2 - 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.
AB - 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.
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U2 - 10.1093/publius/pjz020
DO - 10.1093/publius/pjz020
M3 - Article
AN - SCOPUS:85079223791
VL - 50
SP - 81
EP - 108
JO - Publius
JF - Publius
SN - 0048-5950
IS - 1
ER -