The past three decades have seen the widespread introduction of both state-level and local-level tax and expenditure limits (TELs). Over the same time period, 37 states have legalized state lotteries to raise revenues. The authors assert that the combination of TELs and lotteries may be an optimal strategy for a median voter attempting to lower his or her tax burden while lowering the cost of monitoring the behavior of government officials. They find consistent evidence that the existence of a limit on the increase of property assessments is a positive predictor of the adoption of a lottery, and they also find some evidence that state limits and limits on property tax revenues also influence states to pass lotteries. Other local TELs have a little estimated impact on the lottery decision.
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