Does one size fit all? An analysis of tax and expenditure limitations in Colorado

by Marvin Jr Ward

Institution: American University
Year: 2016
Keywords: Economics; Public administration; Public policy
Posted: 02/05/2017
Record ID: 2068792
Full text PDF: http://pqdtopen.proquest.com/#viewpdf?dispub=3714331


This analysis evaluates three tax and expenditure limitation (TEL) policies in Colorado: the Taxpayers' Bill of Rights (TABOR), the Statewide Limitation on Property Tax Revenue (SLPTR), and the Gallagher Amendment (GA). It extends previous research in two novel ways. First, it enables analysis of overlapping policies while incorporating county-specific characteristics, by abstracting away from specific policies. Rather, the focus rests on the impacts of these policies on property tax levies. Second, it incorporates spatial dependency to account for overlapping populations and economic activity. Econometric and machine learning techniques are employed to analyze county-level panel data from Colorado over the 1993-2009 time period. Within this framework, the revenue and expenditure implications of TEL policies are evaluated, and TELs are found to have material impacts in both cases. TELs are associated with depressed revenues and measurable changes in expenditure behavior. With this context, the final empirical section evaluates the drivers of successful 'deBrucing' efforts, in which localities are able to exempt themselves from components of TABOR and SLPTR. The analysis demonstrates that socioeconomic factors are the dominant determinant of voting outcomes.