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2 edition of Property tax limits and local fiscal behavior found in the catalog.

Property tax limits and local fiscal behavior

Katharine L. Bradbury

Property tax limits and local fiscal behavior

did Massachusetts cities and towns spend too little on town services under Proposition 2 1/2?

by Katharine L. Bradbury

  • 19 Want to read
  • 17 Currently reading

Published by Federal Reserve Bank of Boston in Boston .
Written in English

    Subjects:
  • Tax and expenditure limitations -- Massachusetts.,
  • Municipal finance -- Massachusetts.,
  • Real property tax -- Massachusetts.

  • About the Edition

    This paper examines the impact of a specific local tax limit, Proposition 2 in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the capitalization of that behavior into property values. Proposition 2 places a cap on the effective property tax rate at 2.5 percent and limits nominal annual growth in property tax revenues to 2.5 percent, unless residents pass a referendum (an override) allowing a greater increase. The study analyzes the 1990-94 period, a time when Massachusetts municipalities faced significant fiscal stress because of a 30 percent cut in real estate aid and a demographically driven increase in school enrollments. The findings include the following: (1) Proposition 2 significantly constrained local spending in some communities; (2) constrained communities realized gains in property values to the degree that they were able to increase school spending despite the limitation; and (3) changes in school spending were a much stronger influence on house price changes than were changes in nonschool spending. These findings are confirmed using several different econometric approaches, including a two-stage technique that directly estimates how close each community"s spending was to what it would have been in the absence of Proposition 2 1/2.

    Edition Notes

    Statementby Katharine L. Bradbury, Christopher J. Mayer and Karl E. Case.
    SeriesWorking paper / Federal Reserve Bank of Boston -- no. 97-02., Working paper (Federal Reserve Bank of Boston) -- no. 97-2.
    ContributionsMayer, Christopher J., Case, Karl E.
    The Physical Object
    Pagination35 p. ;
    Number of Pages35
    ID Numbers
    Open LibraryOL15579642M

    A Guide to Property Taxes: The Role of Property Taxes in State and Local Finances examines some of these issues. State Tax and Expenditure Limits (TELs) are designed to curtail growth in government spending by placing constitutional or statutory restrictions on the amount a government entity can spend or tax its citizens. Taxpayers and policymakers alike are drawing attention to opaque tax practices at the local level. Recent evidence suggests that local officials have the incentive to raise extra revenue through less transparent means and are channeling this revenue into assets for future spending. States have an opportunity to make their tax structure more transparent by adjusting tax rates following property.

    der two different property–tax regimes: before and after Proposition 21/ 2, a prop-erty–tax limitation measure that took ef-fect in A measure designed to limit property taxes should constrain the choices of local governments, reducing the extent of strategic interaction. This hy-pothesis is tested by estimating the model.   “The effect of Prop 13 is that it limits property tax growth and limits the benefits to local general funds, no matter what the rate of inflation or the actual cost of providing services to a.

    property tax is the most important local tax, it dominates the local government tax structure. Its history will aid in understanding how the local tax structure itself developed over time (page 12). • Utilization and Limitations- This section describes how property tax rates are set and limitations that affect the application of the tax (page. A description of new property tax program enacted by the Legislature. Overview of Property Taxes: Presentation A presentation to the House Property and Local Tax Division. January Overview of Property Taxes: Handout Handout from a presentation to the House Property and Local Tax Division. January Property Tax Basic Terms.


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Property tax limits and local fiscal behavior by Katharine L. Bradbury Download PDF EPUB FB2

This paper looks at the impact of a specific tax limit, Proposition 2½, on the fiscal behavior of cities and towns in Massachusetts and the effects of that behavior on property values. 1 Proposition 2½ places a cap on the effective property tax rate at percent and limits nominal annual growth in property tax revenues to percent, unless residents pass a referendum (an override) allowing a greater by: Proposition 2 1 2 places a cap on the effective property tax rate at % and limits nominal annual growth in property tax revenues to %, unless residents pass a referendum allowing a greater increase.

The study analyzes the – period, a time when Massachusetts municipalities faced significant fiscal stress because of a 30% cut in real state aid and a demographically driven increase Cited by: This paper examines the impact of a specific local tax limit, Proposition 2* in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the capitalization of that behavior into property values.

Proposition 2* places a cap on the effective property tax rate at percent and limits nominal annual growth in property tax revenues to percent, unless residents pass a Cited by: This paper examines the impact of a specific local tax limit, Proposition 2 in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the capitalization of that behavior into property values.

Proposition 2 places a cap on the effective property tax rate at percent and limits nominal annual growth in property tax revenues to percent, unless residents pass a.

"Property Tax Limits, Local Fiscal Behavior, and Property Values: Evidence from Massachusetts Under Proposition 2 1/2." Journal of Public Econom no. 2 (May ): Each author name for a Columbia Business School faculty member is linked to a faculty research page, Property tax limits and local fiscal behavior book lists additional publications by that faculty member.

This paper looks at the impact of a specific tax limit, Proposition 2, on the] 2 fiscal behavior of cities and towns in Massachusetts and the effects of that 1 1 behavior on property values. Proposition 2 places a cap on the effective property] 2 tax rate at % and limits nominal annual growth in property tax.

Property Tax Limits, Local Fiscal Behavior, and Property Values: Evidence from Massachusetts Under Proposition 2 Article in Journal of Public Economics 80(2) February with 52 Reads. Property tax limits and local fiscal behavior: did Massachusetts cities and towns spend too little on town services under proposition 2 1/2.

By Katharine L. Bradbury. Abstract. This paper examines the impact of a specific local tax limit, Proposition 2½ in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the Author: Katharine L. Bradbury. "Zoning and Property Taxation in a System of Local Governments," Urban Studies, Urban Studies Journal Limited, vol.

12(2), pagesJune. Dye, Richard F. & McGuire, Therese J., "The effect of property tax limitation measures on local government fiscal behavior," Journal of Public Economics, Elsevier, vol.

66(3), pagesDecember. Bradbury, C.J. Mayer, K.E. CaseProperty tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition 2 1 2 Journal Cited by: Property tax limits and local fiscal behavior.

Boston: Federal Reserve Bank of Boston, [] (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Katharine L Bradbury; Christopher J Mayer; Karl E Case. Property tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition.

By Katharine L. Bradbury, Christopher J. Mayer and Karl E. Case. OAI identifier: Provided by: Research Papers in Economics. The effect of property tax limitation measures on local government fiscal behavior, by Richard F.

Dye and Therese J. Mcguire. Journal of Public Economics, December66 (4), Online Reports and Articles A variety of property tax limits: goals, consequences, and.

Limits on the use of the local property tax are of particular interest and concern, given that for many local governments, particularly school districts, which are fiscally the most important local governments, the property tax is the only local source of revenue and the only means of providing a link between spending authority and revenue-raising by: A recently enacted tax limitation measure limits the growth in local property taxes in some Illinois jurisdictions, but not in others.

Such differential treatment of otherwise similar jurisdictions provides a natural experiment for estimating the impact of the tax cap on local government fiscal by:   Revised article published in Journal of Public Econom no.

2 (May ): This paper examines the impact of a specific local tax limit, Proposition 2½ in Massachusetts, on the fiscal behavior of cities and towns in Massachusetts and the capitalization of that behavior into property values.

Many states have imposed limits on property tax rates, property tax revenue, or increases in assessed property values, reducing reliance on the property tax as a source of revenue.

California, for example, limits the tax rate to 1 percent and annual assessment increases to 2 percent until a property is resold. Property Tax Limits and Local Fiscal Behavior: Did Massachusetts Cities and Towns Spend Too Little on Town Services under Proposition 2 1/2.

Complex business and legal matters require intellectually honest and analytically rigorous solutions that are thoughtfully developed and clearly communicated. and to impose various limits on the property tax, including limits on the tax rate, limits on the increase in the property taxes levy, limits on what is taxed, and limits on increases in the assessed value of property.

The latter is the subject of this Size: KB. Beginning in the s, many states adopted new limits that sharply reduced funding for education and other important services by capping property taxes.

The time has come for states to reconsider these harsh limits, which have put severe pressure over time on local governments’ ability to deliver the services that their residents expect and need, from schools and police and.

Key Findings Property tax revenue caps do nothing to change the rising costs facing localities; they only make it harder for localities to provide the services residents demand and need. Increased state aid may help localities avoid cutting services in the short run, but such aid is often unreliable over time.

Localities may pass overrides or increase other local sources of.Property Tax Limitations: An Interpretative Review revenue. Suppose there is a jurisdiction with only two homes, each valued at $ If the local government requires $50 of revenue, each taxpayer will pay $25 under a pure current value assess-ment system.

Next year, the government again needs $50, but one of the homes has.PROPERTY TAX LIMITS. Property tax limits constitute a special category of revenue limit because, in most cases, they are set by state governments but apply to local governments.

Only three states—Hawaii, New Hampshire, and Vermont—do not limit property taxes. State restrictions can apply to the property, to the jurisdiction, or both.