Doctor of Education
Natalia Ermasova, Ph.D.
Mary Bruce, Ph.D.
Dwight Vick, Ph.D.
Background: Tax Expenditure Limitations (TELs) are limits placed on either outlays of cash or creation of new revenues via tax levy by states. There have been many TEL initiatives since the so-called Taxpayer Revolt of the late 1970s.
Purpose: This paper analyzes the impact of TELs on different types of state expenditures. This study provides a comparative analysis of different types of TELs on the state level and aims to evaluate the effect of TEL policy on state expenditure structures.
Methods: Using panel data analysis, this work finds that states with more stringently binding tax and expenditure limitations-in addition to other financial and political factors-are associated with lower levels of state expenditures on police, parks, natural resources, and highway expenditures.
Results: Looking at 50 states from 2006 through 2010, the relationship between TELs and the selected types of state expenditures described above is both statistically and substantively significant.
Conclusions: TEL initiatives have a defined effect on state budgets and operations. Depending on the type of TEL and the type of outlay or levy, the effect can be detrimental to states.
Kulik, Jeffrey M., "Tax Expenditure Limitations (TELs) and State Expenditure Structure" (2016). All Capstone Projects. 230.