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Property Tax Limits, Balanced Budget Rules, and Line-Item Vetoes: A Long-Run View

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  • John A. Dove

    (Troy University)

Abstract

This paper explores the early development of three important fiscal institutions faced by U.S. state governments: property tax limits (PTLs), balanced budget rules (BBRs), and the gubernatorial line-item veto (LIV). Specifically, this study attempts to provide historical context for their development and an empirical investigation of their long-run effect on state finances (running from 1830 to 1920). Results, which are robust to a number of specifications, suggest that early PTLs decreased both revenues and expenditures, BBRs had a larger effect on revenues rather than expenditures, while the LIV had a somewhat limited effect on both revenues and expenditures.

Suggested Citation

  • John A. Dove, 2017. "Property Tax Limits, Balanced Budget Rules, and Line-Item Vetoes: A Long-Run View," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(2), pages 288-317, March.
    • Handle: RePEc:pal:easeco:v:43:y:2017:i:2:d:10.1057_s41302-016-0001-1
    DOI: 10.1057/s41302-016-0001-1
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