Do Tax Revolt Provisions Influence Tuition and Fee Levels?: Evidence from the States using Recent Panel Data

Previous research has shown that Tax Revolt Provisions (TRPs) aimed at limiting state government revenues and/or expenditures, negatively impact public higher education funding. This analysis explores the influence of these same types of policies on average in-state undergraduate tuition and fees at public four-year colleges and universities. Employing a data set spanning 13 years and using an econometric estimator appropriate for finite samples with time-invariant variables related to unit-effects, the findings indicate that TRPs matter, but not equally. Tax and Expenditure Limitations, regardless of provision type, share no discernible relationship with tuition and fees. Conversely, Supermajority requirements are associated with higher levels of tuition and fees by approximately 5.5% to 6.6%. The findings suggest that as policy-makers and researchers seek out the drivers of rising tuition and fees, it would be prudent to take into consideration both the role played by traditionally considered variables and that played by state fiscal policy as well.