New England states are more dependent on the property tax to fund local services, including schools, than most other regions. Nationwide, about half of local revenues come from the property tax. But older industrial cities need to charge higher rates on lower assessed values to get the revenue they need, said Barry Bluestone, Stearns Trustee Professor of Political Economy and Director of the Center for Urban and Regional Policy at Northeastern University in Boston. Bluestone spoke at a Lincoln Lecture Nov. 2 at Lincoln House titled "The Potential for Uneven Economic Development in Massachusetts: The Role of Property Taxation and State Local Aid."
The property tax is a stable source of revenue generally, but it does put older industrial cities such as Pittsfield, New Bedford, Fall River, and Lawrence at a disadvantage: the more they raise rates, the harder it is to attract economic development. The state does step in to make up for shortfalls in local revenue, mostly in the area of school funding. But the state revenue stream is subject to vagaries of the economy, resulting in instability for non-educational local government funding. Spending on police per capita appears even across municipalities, but a closer look reveals much greater police spending per crime in thriving suburban communities, Bluestone said.
One surprising finding in Bluestone's research: the inequities would be much greater without Proposition 2 ½, which limits the increase in revenue raised from the property tax across all 351 Massachusetts cities and towns.