Computing the Extent of Circumvention of Proposition 13: A Response
American Economic Journal of Economics and Sociology, Forthcoming
8 Pages Posted: 30 Dec 2009
Date Written: December 29, 2009
Galles and Sexton (1998) showed that California state and local revenues exceeded their previous real per capita levels as did the sum of property taxes plus charges and miscellaneous revenues within a decade after Proposition 13 passed, and concluded that Proposition 13 was only temporarily successful at shrinking California state and local governments. Khoury and Pal (2000) challenge this conclusion. However, their conclusion that Proposition 13’s circumvention “has been only marginal” results from using per $1000 of income comparisons rather than real per capita comparisons and from using growth rate changes, which fail to adjust for U.S. fiscal trends, instead of changes in the levels of variables as their primary measure.
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