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.
CITATION STYLE
Zhang, P., & Hou, Y. (2020). The impact of tax and expenditure limitations on user fees and charges in local government finance: Evidence from New England. Publius, 50(1), 81–108. https://doi.org/10.1093/publius/pjz020
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