ABSTRACT
States have a variety of statutory control mechanisms over their state and local government's fiscal choices including taxation and spending. During recent decades, the fiscal control mechanisms have been controlling governmental fiscal decisions. These mechanisms known as Tax and Expenditure Limits (TELs) have not been highly effective in controlling the levels of taxation and spending in state and local governments. If state governments are silent over a local power, it is assumed that the localities lack authority, and therefore the state holds all power in state-local relationships. States have a wide array of regulative power over municipal budgeting, which was developed in the early twentieth century and modified during the Great Depression. These legal frames still influence local budgeting. When TELs rebase annual tax and expenditure limits to actual revenues or expenditures in the immediate previous year, the gap between TELs and expected revenues and expenditures is to be minimized.
