Adoption of Property Tax Expenditure and Limitations by U.S. States A Multiple Events History Analysis

Abstract

Property tax expenditure and limitations (TELs) are key tools used by U.S. states to control local government spending and taxing authority. This paper employs a multiple events history analysis to understand the factors influencing the adoption of county-level property tax TELs by state governments. The findings show that external factors such as policy learning, competition, imitation, and coercion play crucial roles in this process. Notably, the study reveals that higher out-migration rates and the presence of voter-based ballot initiatives significantly increase the likelihood of TEL adoption. Additionally, the spread of TELs is influenced more by national trends rather than neighboring state actions, highlighting the saliency of these policies. These findings shed light on the dynamics of policy diffusion and provide insights into the interplay between state-level decisions and local government financial autonomy. The study’s implications extend beyond public finance, offering a nuanced understanding of policy adoption and diffusion in federal systems.