The Fiscal Limitation Movement

Present Context and Outlook

by Phyllis L. Ellickson

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Discusses how current approaches to fiscal limitation at state and local level compare with previous measures and forecasts likely effects of fiscal limitation movement. Current efforts can be classified into those aimed at: (1) cutting back existing levels of government expenditure and taxation; and (2) restricting their future growth. Growth limit measures outnumber more restrictive cutback measures, but both approaches tend to neglect consideration of fiscal interdependency between state and local government. The 1970s have witnessed a shift toward limiting overall property tax revenues; restricting state as well as local growth; and enacting constitutional as opposed to statutory controls. Trends toward limiting state and local growth and enacting citizen-initiated constitutional amendments are likely to continue. These conclusions suggest the current movement will accelerate existing trends toward centralization of the state-local fiscal system, increase incentives for budget obfuscation, and place greater pressure on the federal government for financial aid to both local and state governments.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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