The Property Tax and the Fortunes of Older Industrial Cities

Decades ago this discontent led to such tax limitation measures as Proposition 13 in California and Proposition 2½ in Massachusetts. More recently, this movement has been driven by sharply rising property tax levies in many cities and suburbs as a result of the extraordinary appreciation in property values over the past few years. The high visibility of the property tax, which in contrast to sales and income taxes is often paid annually in one or two large installments, makes this form of revenue generation an attractive target for taxpayer antipathy.

From the conclusion of the article:

"But even with a Herculean redistribution of resources through state local aid, older industrial cities are at a distinct disadvantage in competing for new investment and new jobs. Our research suggests that while the property tax remains an important part of the local finance apparatus, it cannot, on its own, ensure the equitable provision of municipal services to rich and poor communities alike.

The amenities available to residents and businesses should not be contingent upon the unique economic circumstances, positive or negative, that have affected the fortunes of the communities where they have decided to locate. There is no simple remedy to this problem, but it suggests at least two things are needed to keep

uneven development from becoming even more pronounced. First, the state government must continue to provide resources needed by poorer cities and towns to keep their communities viable and able to play a role in the overall economic development of state. S econd, more study is needed to determine whether providing local communities with a more diverse set of fiscal tools, such as local income and sales taxes, would lead to more equity among local communities."

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