Answers are grounded in this paper and cite their sources.
Shows D-LSTs positively affect general fund expenditures in Texas cities, suggesting beneficial spending implications.
Do dedicated local sales taxes (D‐LSTs) supplement or supplant general‐purpose spending? The study applies heterogeneity‐robust staggered difference‐in‐differences estimator of Callaway and Sant'Anna (C&S, 2021) and interactive fixed effects (IFE) estimation on a panel of Texas cities. The C&S aggregate average treatment effect on General Fund expenditures is positive. The IFE estimator, which relaxes the parallel trends assumption, confirms that all D‐LST types produce positive effects on the General Fund, with property tax relief and economic development designations generating the largest responses. These patterns support the supplementing hypothesis: voter‐approved earmarks do not reduce operational expenditures as classical fungibility theory predicts.
No takes yet. Share an insight, caveat, or question.
Adu et al. (2026) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: