Impact of Tax and Expenditure Limits on Local Government Use of Tax-supported Debt

Sharon N. Kioko and Pengju Zhang

Public Finance Review, 2019, vol. 47, issue 2, 409-432

Abstract: This study seeks to broaden our understanding of the impact tax and expenditure limits (TELs) have had on local governments. We chose to focus on local government use of tax-supported debt as TELs are limits on the property tax base and related revenues, two essential components used to determine a government’s legal authority to issue tax-supported debt and its fiscal capacity to maintain long-term solvency. Using county-level data, our analysis finds TELs have a negative impact on local government use of tax-supported debt, especially if the government is subject to a limitation on assessed valuation or the property tax levy.

Keywords: debt; tax and expenditure limits (TELs); debt limits (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:47:y:2019:i:2:p:409-432

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