Do Tax and Expenditure Limits Provide a Free Lunch? Evidence on the Link Between Limits and Public Sector Service Quality

We summarize research addressing the validity of the argument that constitutional constraints such as Proposition 13 could reduce the size of local governments while having little effect on the quality of public services provided. A growing body of research is producing a consistent conclusion; impo...

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Bibliographic Details
Published in:National tax journal 1999-03, Vol.52 (1), p.113-128
Main Authors: Downes, Thomas A., Figlio, David N.
Format: Article
Language:English
Subjects:
Analysis
Capital expenditures
Case studies
Economic theory
Education
Effects
Expenditures
Finance
FORUM ON PROPOSITION 13
Government services
Income taxes
Influence
Local finance
Local government
Local taxation
Outcomes of education
Property taxes
Public schools
Public sector
Public services
Quality of service
Researchers
School districts
State taxes
Students
Studies
Tax law
Tax reform
Taxes
Voters
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Summary:We summarize research addressing the validity of the argument that constitutional constraints such as Proposition 13 could reduce the size of local governments while having little effect on the quality of public services provided. A growing body of research is producing a consistent conclusion; imposition of tax and expenditure limits results in long-run reductions in the performance of public school students. We provide evidence that reconciles these reductions with the dominant result of the education production literature: dollars matter little. Whether limits are good public policy remains an open question, because work remains on the quantification of their costs and benefits.
ISSN:0028-0283
1944-7477
DOI:10.1086/NTJ41789380