The Impact of the Tax Revolt Era State Fiscal Caps: A Research Update

Fiscal caps, the most common form of fiscal limit adopted during the tax revolt era, are again on the agendas of state government. In this article, we evaluate the claims made by cap supporters and opponents by examining the impacts of caps adopted during the tax revolt. Updating Lowery and Cox's (1990) analysis of the impact of state fiscal caps through 1991 using a comparative state, interrupted time-series design, we find some evidence—albeit very weak—that fiscal caps may have modestly reduced the size of government and no evidence that they have been evaded through budget end-runs.