The property tax, a mainstay of local government, is the subject of continual controversy, with numerous ballot measure to place caps on it, or even in some cases proposals to eliminate it completely. But in fact it is a fair, democratic, stable and efficient source local revenue, attorney and property tax expert Joan Youngman argues in A Good Tax: Legal and Policy Issues for the Property Tax in the United States, published this month by the Lincoln Institute of Land Policy.
The property tax generates some $472 billion per year in local revenue in the United States, making it a critical source of funding for schools, police and fire protection, and other public services. It is also a highly transparent tax, holding local governments accountable to citizens, who can see clearly how their tax dollars are spent.
However, a series of populist revolts, beginning with California’s Proposition 13 in 1978, have weakened the property tax and led to unintended consequences.
“Ironically, many property tax limitations enacted in the name of fairness have actually distorted the tax base and introduced inequities,” Youngman said. “I hope this book will serve as a roadmap for a new path forward, helping policymakers strengthen the property tax as a fair, stable and efficient source local revenue and autonomy.”
Through a detailed analysis of the legislative and administrative issues facing policymakers, Youngman outlines ways in which state and local governments can provide taxpayer relief, when necessary, while preserving crucial provisions of the property tax, such as the accurate assessment of every property based on the fair market value.
“At a time when many governments are facing fiscal difficulties and the need to address delayed or deferred financial obligations of all types, an effective property tax can be a valuable instrument for the common good,” Youngman writes.
The comprehensive assessment of the current state of the property tax covers the following topics:
- Progressivity, Regressivity, and Fairness
- Values and Valuation
- Property Taxes and School Finance
- Tax Increment Financing
- Classification and Differential Taxation
- Open Space and Conservation Easements
- Farmland Assessment and Current Use Taxation
- The Valuation of Federally Subsidized Low-Income Housing
- Exemptions and Payments in Lieu of Taxes
- Tax Restrictions and Assessment Limits
- Tax Limitations and Accurate Assessments: The Massachusetts Experience
Youngman is a senior fellow and chair of the Department of Valuation and Taxation at the Lincoln Institute. She is an attorney and author of numerous articles concerning the taxation of land and buildings. She is the author of Legal Issues in Property Valuation and Taxation: Cases and Materials (2006), a co-author of State and Local Taxation: Cases and Materials (10th edition, 2014), and coeditor of Erosion of the Property Tax Base (2009), Making the Property Tax Work – Experiences in Developing and Transitional Countries (2008), and The Development of Property Taxation in Economies in Transition: Case Studies from Central and Eastern Europe (2001).