A NATIONAL PERSPECTIVE ON THE NATURE AND EFFECTS OF THE LOCAL PROPERTY TAX REVOLT, 1976-1986

Abstract

This paper presents new data on state limitations on municipal government property taxation and spending for all fifty states between 1976 and 1986. Cross-section and first difference models estimate the impact of the different limitations on the growth in property tax revenues and total municipal revenues. Results from the first difference models reveal that the magnitude of the reduction in property tax revenue growth due to state limitations is often underestimated by simpler cross-section models. According to the first different models, property tax rate limits that are coupled with limits on assessment increases reduce the growth in per capita property tax revenue by more than 40 percent. Limits on the growth rate in property levies and limits on the growth in total ownsource tax revenues also significantly reduce the growth in property tax revenues but by smaller amounts.