Did the property tax revolt affect local government wages and employment? Evidence from the States

Abstract

The property tax revolt of the 1970's and 1980's saw many new restrictions placed on local government budgets. Most of these restrictions took the form of local tax and expenditure limitations (TELs) which focused on property taxes. The purpose of this study is to examine whether or not local TELs have reduced local government wages and employment. Anticipating the results, the author demonstrates, using a panel data set on local government wages and employment (1972–1992), the following points: TELs decrease local government wages and employment; the stringency of the TEL law matters; and public sector unions neutralise the constraining effects of TELs.