State Spending Limits

May 12, 2005

With state and local spending on the rise, tax burdens have skyrocketed. Ohioans are fed up with state and local governments spending beyond their means, and there is a proposal to introduce a tax and expenditure limitation, or TEL.

A TEL is a Constitutional restraint that keeps state and local government from spending more than a state economy can afford. It works by putting a Constitutional limit on the year-to-year growth in state and local spending. The current proposed limit in Ohio is either (a) Consumer Price Index (CPI) plus population growth or (b) 3.5%, whichever is greater. Currently, Ohio has no restrictions on state or local government spending. According to the National Conference of State Legislatures (NCSL), only Colorado, Oklahoma and Oregon currently have a TEL. Many states have limits on spending or revenue, but only three states have caps on both.

For more on Ohio’s tax politics, take a look at Scott Hodge’s 2004 commentary here.

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