Local Fiscal Response to State Preemption: A Case Study of Massachusetts’ Proposition 2½ Tax Referendum
Shu Wang,
Yonghong Wu
Abstract:State preemption in the form of tax and expenditure limits significantly limits local revenue-raising capacity. To gain insights into how local governments respond to fiscal preemption through direct democracy, this study focuses on tax referenda that override the levy limit set by Proposition 2½ in Massachusetts. Analyzing a sample of 320 municipalities from 2010 to 2021, we investigate the influence of fiscal slack resources and tax burden on the levy limit overrides and exclusions. Our analysis breaks down … Show more
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