The Distributional Effects of Property Tax Constraints on School Districts

2021 ◽  
pp. 000-000
Author(s):  
Lucy Sorensen ◽  
Youngsung Kim ◽  
Moontae Hwang
Keyword(s):  
School Districts ◽  
Property Tax ◽  
Distributional Effects

scholarly journals The Fiscal Effects of Tax Increment Financing on Rural School Districts: The Case of Iowa

AERA Open ◽  
2021 ◽  
Vol 7 ◽  
pp. 233285842199114
Author(s):  
Phuong Nguyen-Hoang
Keyword(s):  
Rural Communities ◽  
School Districts ◽  
Property Tax ◽  
Rural School ◽  
Tax Rates ◽  
Rural School Districts ◽  
Tax Increment Financing ◽  
Tax Base ◽  
Positive Effects ◽  
Development Tool

Tax increment financing (TIF)—an economic (re)development tool originally designed for urban cities—has been available to rural communities for decades. This is the first study to focus solely on TIF in rural school districts, to examine TIF effects on school districts’ property tax base and rates, and to conduct event-study estimations of TIF effects. The study finds that TIF has mostly positive effects on rural school districts’ property tax base and mixed effects on property tax rates, and that TIF-induced increases in tax base come primarily from residential property and slightly from commercial property. The study’s findings assert the importance of returned excess increment if rural school districts in Iowa and many other states are to benefit from TIF.

Cap and Gap: The Fiscal Effects of Property Tax Levy Limits in New York

2020 ◽  
pp. 1-49
Author(s):  
Phuong Nguyen-Hoang ◽  
Pengju Zhang
Keyword(s):  
New York ◽  
School Districts ◽  
Event Study ◽  
Property Tax ◽  
Total Current ◽  
Central Administration ◽  
Difference In Differences ◽  
Teacher Salaries ◽  
Expenditures Per Pupil ◽  
Over Time

This is the first study to examine the fiscal effects of the New York property tax levy limit, using variation from the degree of fiscal stringency across school districts and over time in its first five years of implementation. Based on a difference-in-differences estimator coupled with an event study specification, we find that the tax limit has imposed a real cap on many school districts; that is, at-limit districts' total current expenditures per pupil are significantly lower than what they would have spent absent the limit. For those affected school districts, this expenditure gap does not come from spending on teacher salaries or fringe benefits but rather from other instructional salaries/expenses, central administration, transportation, interfund transfers, and undistributed spending. We also find heterogeneity in the constraining effects of the tax limit across different need-based groups of school districts.

scholarly journals Did Cuts in State Aid During the Great Recession Lead to Changes in Local Property Taxes?

2014 ◽  
Vol 9 (4) ◽  
pp. 383-416 ◽  
Author(s):  
Rajashri Chakrabarti ◽  
Max Livingston ◽  
Joydeep Roy
Keyword(s):  
School Districts ◽  
Great Recession ◽  
Property Tax ◽  
Negative Relationship ◽  
Local Property ◽  
Relative Increase ◽  
State Aid ◽  
Tax Rate ◽  
The Great Recession ◽  
Recession Period

The Great Recession led to marked declines in state revenue. In this paper we investigate whether (and how) local school districts modified their funding and taxing decisions in response to state aid declines in the post-recession period. Our results reveal school districts responded to state aid cuts in the post-recession period by countering these cuts. Relative to the pre-recession period, a unit decrease in state aid was associated with a relative increase in local funding. To further probe the school district role, we explore whether the property tax rate, which reflects decisions of districts facing budgetary needs, responded to state aid cuts. We find, relative to the pre-recession period, the post-recession period was characterized by a strong negative relationship between property tax rate and state aid per pupil. We also find important heterogeneities in these responses by region, property wealth, and importance of School Tax Relief Program revenue in district budgets.

The Effects of Rate Limits on Property Tax Revenues and School Expenditures: Evidence from Texas

2009 ◽  
Vol 31 (2) ◽  
pp. 81-107 ◽  
Author(s):  
Elizabeth Plummer ◽  
Robert J. Pavur
Keyword(s):  
School Districts ◽  
Student Performance ◽  
Test Scores ◽  
Property Tax ◽  
School Expenditures ◽  
Tax Revenues ◽  
Long Run ◽  
Short Run ◽  
Rate Limit ◽  
Percent Rate

ABSTRACT: In 1993, Texas established a maximum 1.5 percent property tax rate that school districts could impose for purposes of funding their maintenance and operations (M&O). Tax limits are intended to contain government growth and increase the efficiency of government services. Almost all states use property tax limits, and their use continues to increase as states consider ways to decrease the growth in property taxes. This study examines whether the 1.5 percent rate limit lowered the growth of M&O tax revenues and school expenditures, whether these effects differed in the short-run versus long-run, and whether school districts increased other tax and nontax revenue sources to help compensate for lower M&O tax revenues. This study also examines whether the rate limit affected student performance. We use a sample of 1,033 Texas school districts during the period 1994 through 2004, and the Heckman maximum likelihood estimation (MLE) approach to help control for selection bias. We find that the 1.5 percent rate limit decreased the growth of M&O tax revenues and school expenditures, and that expenditures were affected less than M&O tax revenues. Our results suggest that districts helped cushion the rate limit’s effect on expenditures by increasing their debt-related tax revenues. We find only limited evidence that the rate limit’s effects differed in the short-run versus long-run. Finally, we find that student test scores are lower for districts at the 1.5 percent rate limit, and that the decrease in test scores is larger for economically disadvantaged students relative to other students. This suggests that the rate limit is associated with decreases in education quality.

scholarly journals Some Distributional Effects of Reducing the Property Tax in Rural and Urban Areas

1974 ◽  
Vol 6 (2) ◽  
pp. 109-114
Author(s):  
Fred C. White ◽  
Bill R. Miller
Keyword(s):  
Urban Areas ◽  
Property Tax ◽  
Income Taxes ◽  
Property Taxes ◽  
Distributional Effects ◽  
Basic Technique ◽  
Rural And Urban Areas ◽  
Rural And Urban

A question now being asked in many states is whether the property tax is too burdensome and whether it should be displaced by another tax. Many states have lowered property taxes on specific classes of property, while other states are considering more widespread relief from property taxes. If property taxes are reduced, other taxes will have to be increased in order to offset reductions in government revenues. What is the effect of substituting one tax for another; who will pay more and who will pay less if property taxes are decreased and sales or income taxes increased? Will overall regressiveness of taxes be reduced by substitution? The basic technique of sampling and analysis presented here hopefully will be applicable in many states and will provide important answers to these questions.

scholarly journals A More Accurate Measure of Local Public Goods: Overlapping Government Combinations as Units of Analysis

2014 ◽  
Vol 2014 ◽  
pp. 1-8 ◽  
Author(s):  
Samuel B. Stone
Keyword(s):  
School Districts ◽  
Public Goods ◽  
Property Tax ◽  
Metropolitan Region ◽  
Local Public Goods ◽  
Fort Worth ◽  
Tax Rates ◽  
Special Districts ◽  
Units Of Analysis ◽  
Property Owners

This study posits and tests the viability of a new unit of analysis for local public goods in metropolitan areas: overlapping government combinations (OGCs). Counties, municipalities, school districts, and other special districts operate simultaneously within the same space, each providing their own set of local public goods. Residents of the same city can live within the boundaries of different counties, school districts and other special districts and thus receive (and pay for) very different quantities and qualities of public goods. Though there is a great deal of literature devoted to the variation of local public goods in a fragmented metropolitan region, there is none that cumulates the different local government types into units that represent the true bundles of local public goods that are provided to citizens and property owners. This study tackles this problem through the application of geographic information systems (GIS) to stack counties, municipalities, and school districts in the Dallas-Fort Worth-Arlington CMSA into unique OGCs. The unique OGCs are compared to their underlying component governments with respect to property tax rates and school performance and are found to be statistically distinct.

scholarly journals Property Tax Cap Policy in Indiana and Implications for Public School Funding Equity

2019 ◽  
Vol 15 (9) ◽  
Author(s):  
Scott J. Bowling ◽  
Lori G. Boyland ◽  
Kim M. Kirkeby
Keyword(s):  
Public School ◽  
School Districts ◽  
Property Tax ◽  
School Funding ◽  
Public School Districts ◽  
Property Taxes ◽  
Policy And Practice ◽  
Funding Equity ◽  
Public School Funding ◽  
Tax Caps

The purpose of this research was to examine funding losses experienced by preschool to grade 12 (P–12) public school districts in Indiana, U.S., from an equity standpoint after the implementation of statewide property tax caps. All Indiana public school districts (N = 292) rely on property taxes as a major source of revenue, but districts experienced widely varying losses after the tax reform. Analyses across an array of district characteristics revealed significant relationships between differential funding losses and demographic indicators, including total student enrollment and the percentages of certain minoritized students. Implications for policy and practice include the integration of findings with essential research on funding equity in public education and attention on leadership toward reducing funding disparities.

Meeting the Needs for State and Local Revenues in the Postwar Era

1944 ◽  
Vol 38 (5) ◽  
pp. 904-912
Author(s):  
W. Brooke Graves ◽  
Karl W. H. Scholz
Keyword(s):  
School Districts ◽  
Property Tax ◽  
Federal Agencies ◽  
The South ◽  
Federal Grants ◽  
Intergovernmental Fiscal Relations ◽  
Tax System ◽  
Important Field ◽  
State And Local ◽  
Set Up

“The financing of government in the South presents an important field of study. The needs in relation to sources of revenue are greater in the South than in other parts of the nation. The South has relied heavily on the property tax to meet these needs, but it has also experimented widely with other forms of taxation. It has depended on federal grants to a great extent, though it has had difficulty in meeting certain conditions set up for some of these grants. The whole subject of government finance needs to be further studied and the experiences of the various states in the area need to be compared and contrasted. Materials will be found in state reports, in the reports of federal agencies which distribute grants-in-aid, and in the findings cf various groups which have studied the general problem, as, for example, the Advisory Committee on Education which reported to the President in 1939, and the Committee on Intergovernmental Fiscal Relations set up by the Department of the Treasury.”Much of the foregoing comment by a group of Southern political scientists with special reference to the Southern region is equally applicable to states in other sections of the country. It has often been alleged that the American tax system, in so far as it may be called a system at all, is a survival of the horse-and-buggy age. The thousands of small local taxing jurisdictions existing throughout the country—some 165,000 of them—are striking evidence of our antiquated methods of levying and collecting taxes. In Pennsylvania alone—and many other states are in a worse condition—there are approximately 5,200 local units of government, half of them school districts, and all of them with the power to tax and to incur debt.

Strategic Interaction Among Overlapping Local Jurisdictions

2017 ◽  
Vol 48 (6) ◽  
pp. 584-595 ◽  
Author(s):  
Spencer T. Brien
Keyword(s):  
School Districts ◽  
Dynamic Model ◽  
Local Governments ◽  
Property Tax ◽  
Strategic Interaction ◽  
Fiscal Policies ◽  
Strategic Interactions ◽  
Complete Understanding ◽  
Short Term ◽  
Tax Rate

This article explores the strategic interactions between overlapping counties and school districts within the context of property tax policy. Overlapping local governments share either part or all of their property tax bases and therefore may take into account each other’s tax policies when deciding their annual property tax rate. A dynamic model is developed to analyze how property tax rate determination is influenced by the fiscal policies of both overlapping and neighboring local jurisdictions. The results suggest a short-term mimicking effect that is largely canceled out the following period. These findings help to develop a more complete understanding of how the broader set of environmental and institutional attributes of local governments influence their fiscal policies.

The Local Impact of School Finance Reform in Four Texas School Districts

1994 ◽  
Vol 16 (4) ◽  
pp. 391-404 ◽  
Author(s):  
Lawrence O. Picus
Keyword(s):  
School Districts ◽  
School Improvement ◽  
School Finance ◽  
Core Curriculum ◽  
Property Tax ◽  
Finance Reform ◽  
School Finance Reform ◽  
Fiscal Conditions ◽  
Local Impact ◽  
Texas School Districts

This article describes how four Texas school districts responded to changed fiscal conditions following the implementation of reforms designed to bring greater equity to Texas school finance. Case studies in two poor districts revealed that although there were substantial increases in funding available, very little of this new money was spent on improvements to the core curriculum. In the two wealthy districts, one struggled to maintain current spending levels, with very few changes in priorities, while the other was able to pass a substantial property tax increase for school improvement. However, a substantial portion of the increased funds was used to replace lost state money.

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