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Spending and Taxes, 1970–2000

Spending and Taxes, 1970–2000

(p.29) Chapter 3 Spending and Taxes, 1970–2000
For the Many or the Few
University of Chicago Press

This chapter investigates how the initiative affects spending and taxes. To preview the findings, it shows that, over the last three decades, the initiative had three significant effects on fiscal policy. First, it cut the overall size of state and local government, as measured by revenue or expenditure. Second, the initiative shifted disbursement of funds from state to local governments; that is, it “decentralized” government spending. Third, the initiative altered the way funds are raised: it reduced the reliance on taxes in favor of user fees and charges for services. These results establish benchmarks that can be compared with opinion data to see if the initiative brought about policy changes supported or opposed by the majority, and also are interesting in their own right because they shed light on how important, if at all, the initiative is in practice.

Keywords:   initiative, spending, taxes, fiscal policy, revenue expenditure, local government, decentralization

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