C  2011 Public Financial Publications, Inc. Simulation of a Constitutional Spending Limit for a Conservative State: With Dynamic Adjustment and Sensitivity Analysis JOHN MERRIFIELD AND DEREK MONSON Longstanding concern about the rate of state and local government spending growth, strengthened by “Great Recession” economic and fiscal conditions, sus- tains advocacy of constitutional amendments to cap the growth of state and local taxes or spending. For some states, interest recently changed to necessity, and cur- rent constitutional limits—most notably the California experience with the Gann Spending limit (1979–1990) and the Colorado experience with its Taxpayer Bill of Rights (1992-present)—contain numerous valuable lessons for fiscal restraint proponents. We use those lessons, and others, to develop a constitutional spending limit (CSL) for Utah, and describe a CSL simulation for the state for 1990–2009. In contrast to what an “Institutional Irrelevance Perspective” suggests for a politically conservative state such as Utah, we find that Utah would have seen large and robust CSL impacts from setting the spending growth rate at school-age population plus inflation for K-12 education funding, and at population plus inflation for remaining nonexempt state spending. 1 Those impacts include a reduced tax burden, sizable reserves to cope with emergencies, elimination of fiscal crises, and expanded personal income. Extensive sensitivity analysis identifies the key underlying factors and demonstrates the robustness of those findings. We compare the Utah results to a 1990–2009 CSL simulation for California, and a 1995–2009 CSL simulation for Ohio. John Merrifield is a Professor of Economics, University of Texas—San Antonio (78207). He can be reached at John.Merrifield@utsa.edu. Derek Monson is a Policy Manager, Sutherland Institute, Salt Lake City, Utah. He can be reached at dmonson@sutherlandinstitute.org. 1. Typically federally funded programs and programs funded by narrowly earmarked taxes. Merrifield and Monson / Simulation of a Constitutional Spending Limit 1