The recent recession has been recognized as the worst in memory, and its effects are still being felt. Less well understood is the fact that this recession has been far worse for state governments than the drop in gross domestic product (GDP) would suggest. While state government finances have stopped falling off a cliff, they are closer to the bottom of that cliff than the top. Tax receipts have not returned to their pre-recession levels, and new revenue demands may overwhelm any interim improvements in collections. Even if states can avoid these challenges, it will be a long, slow road to fiscal recovery, with several large risks along the way.

State and local governments play a major role in the economy and in our daily lives. They finance more than 90 percent of K-12 education and deliver virtually all of it. Public colleges and universities educate three-quarters of students enrolled in degree-granting institutions. State and local governments oversee, design, and build more than 90 percent of the nation’s public infrastructure. They finance much of the nation’s social safety net and implement much of it as well. In fact, state and local governments spend more on direct implementation of domestic policy than does the federal government.

The services financed and delivered by state and local governments tend to have stable and generally rising demand. When a recession hits, there is no reduction in the numbers of children in school or elderly people in nursing homes—two of the most important spending areas for state and local governments—or in the numbers of fires or crimes. For programs such as Medicaid and higher education, for example, demand for the kinds of services that state and local governments provide typically rises during recessions. Unless and until states can fix their revenue structures or develop adequate reserves, public policy will continue to gyrate with every turn in the economy.

Decline in State Tax Collections

The Great Recession that started in December 2007 was the deepest and longest recession since the Great Depression of the 1930s. The unemployment rate rose to 10.1 percent and has remained stubbornly high, falling only to 9.1 percent after two years of recovery. State tax collections plummeted, falling for five consecutive quarters beginning in the fourth quarter of 2008 and continuing through 2009. Tax revenue fell by a dizzying 16.8 percent in the second quarter of 2009, and over the next several years it declined further and more sharply than it had in any other recession since World War II (figure 1).

The recent drop in GDP has been significant in comparison to past recessions, but the declines in taxable consumption and personal income, two components that typically constitute the tax bases of state and local government, have been far worse. Taxable consumption fell by about 11 percent, while GDP fell by about 5 percent. Taxable components of personal income also fell much more sharply than the overall economy and still languish more than 5 percent below the pre-recession peak, reflecting the jobless recovery.

Even though this has been the worst post-war recession by traditional economic measures, these measures do not tell the whole story. Capital gains, an important component of state tax bases, are not included in personal income as measured in the nation’s economic accounts. These gains have increased in importance and are a major cause of increased volatility in state finances. Capital gains fell by more than 55 percent, driving down tax collections in the final quarter of the 2009 fiscal year, when tax returns reflecting the 2008 stock market collapse were filed.

The net result of these and other forces was huge declines in state income, sales, and corporate taxes. Figure 2 shows that annual income taxes fell by more than 15 percent in inflation-adjusted terms, sales taxes fell by more than 10 percent, and corporate income taxes fell by more than 25 percent. Property taxes, which are crucial to local governments but generally not a significant revenue source for states, remained quite stable through much of the period, although they are beginning to weaken and in some parts of the country have fallen significantly.

A Slow Recovery

The recession ended in June 2009 and the economy has been recovering slowly. State tax collections grew in each quarter of calendar year 2010, and the character of that growth has improved over time. In the first two quarters of 2010, increased tax rates more than offset declines caused by the weak underlying economy, but in the last two quarters tax revenue growth was driven primarily by the improving economy. By the fourth quarter, tax revenue grew by 7.8 percent, but even with-out tax rate increases it would have grown by 7.0 percent. Tax revenue in the January–March 2011 quarter grew 9.3 percent compared to the previous year, and 21 states had double-digit growth. Preliminary data for the April–June quarter show tax revenue up 11.4 percent.

Inflation-adjusted state tax revenue for the nation as a whole in the latest four quarters (ending in the first quarter of calendar year 2011) was 7.7 percent below the peak attained in 2007. The heady growth in the first two quarters of 2011 probably cannot be sustained because much of it appears to have been driven by stock market gains in tax year 2010, boosting income tax returns in the second quarter. Those gains almost certainly will not be repeated in 2011.

In addition, turmoil in European debt markets and the recent Standard & Poor’s downgrade of U.S. long-term debt have contributed to fears of a double-dip recession. There are indications that economic growth will be slower than most states have assumed in their current budgets. States are closer to the bottom of the cliff than the top, and are at risk of falling back down. Meanwhile, there are some signs that local government tax revenue also is beginning to weaken.

While tax revenues are now growing in most states compared to the last year’s low collection rates, they have not reached the levels prior to the recession. After adjusting for inflation, tax revenues for the latest four quarters are below the calendar year 2007 level in 43 states, and revenues are 10 percent or more below that level in 20 of those states. Among the seven states showing a positive shift in revenue collection, only Oregon (8.9 percent), Delaware (13 percent), and North Dakota (62.9 percent) are at levels above 2 percent.

State and Local Government Responses

States hit by falling revenue also face rising entitlement costs driven in large part by Medicaid enrollment, which typically increases after unemployed workers exhaust health insurance benefits. According to the National Association of State Budget Officers (2011, ix), Medicaid enrollment rose by 8.1 percent in fiscal year 2010, and by an estimated 5.4 percent in fiscal year 2011; states project a further increase of 3.8 percent in fiscal year 2012. These and other types of required expenditures cause further stress in the day-to-day operations of state and local governments.

It is difficult to measure the impact of spending cuts on state and local programs, but changes in state and local government employment can be tracked. Although private sector employment fell sharply from the beginning of the recession, state and local government employment continued to rise modestly for about a year and a half. Shortly before private sector employment reached its nadir, state and local government employment began to decline, and states and localities have been cutting employment aggressively. Local government employment is now about 3 percent below its peak, and state government employment is about 2 percent below its peak.

Education employment in most states is related primarily to higher education—community colleges, four-year colleges, and universities—although some is related to the administrative bureaucracy for elementary and secondary education, and in some states it includes part of the K-12 workforce. State government education employment has continued to rise significantly throughout the recession and recovery, reflecting in part the increased demand for higher education that usually comes with recessions (figure 3). When jobs are hard to find, many people choose to build skills and knowledge by entering an education program or extending their time in school (Betts and McFarland 1995).

Meanwhile, state governments have been cutting noneducation employment at an accelerating pace, so that it is now down almost 5 percent from its mid-2008 peak, nearly comparable to the current, slightly recovered condition for private sector employment. In each of the nine previous recessions, state government noneducation employment either did not decline at all or it declined by much less, as was the case in the 2001 recession.

Figure 4 shows the same employment data for local governments, which are being hit increasingly hard by slowing property taxes and cuts in state aid. Education employment is now down about 3.5 percent from its late-2008 peak, and the noneducation sector is down about the same percentage from its peak. There are no signs that these cuts are slowing, and little reason to believe they will abate in the near term.

Continuing Fiscal Pressures

The recent improvement in state tax revenue is welcome, but many challenges remain. States still face fiscal trouble for four main reasons. First, total revenue remains well below its peak. Second, the recession has had lagged fiscal effects, driving up the demand for many government services, especially Medicaid, other safety net programs, and higher education. The recession also has created other pressures and problems for states by depleting unemployment insurance trust funds, which may lead to higher unemployment insurances taxes in order to repay federal loans.

Third, state cyclical adjustments are not yet complete because they must contend with losses in both federal stimulus aid of more than $50 billion in fiscal year 2011–12 and the fact that temporary revenue measures put in place in response to the recession will expire soon. Fourth, even after this cycle is fully stabilized, states will have to contend with large increases in pension contributions and payments for retiree health care—a pressure that is likely to build for years to come for several reasons, including: increasing numbers of retirements by an aging workforce; the likelihood that health care costs will continue to rise more quickly than the overall rate of economic growth (Keehan et al. 2011); and, in the case of some pension systems and most retiree health plans, years of chronic underfunding.

States finance these services with unstable revenue sources, and tax revenue has become much less dependable over the last two decades, reflecting in large part the increasing role of volatile capital gains taxes. Unless and until states broaden their tax bases to make their revenue structures less volatile, or develop adequate reserves, public policy will continue to gyrate with every turn in the economy.

About the Author

Donald Boyd is the executive director of the national Task Force on the State Budget Crisis, co-chaired by former Federal Reserve Board chairman Paul Volcker and former New York lieutenant governor Richard Ravitch. Boyd is currently on leave from his responsibilities as senior fellow at the Rockefeller Institute of Government, where he conducts research on state and local government fiscal issues.

References

Betts, Julian R., and Laurel L. McFarland. 1995. Safe port in a storm: The impact of labor market conditions on community college enrollments. Journal of Human Resources 30(4):741–765.

Boyd, Donald. 2011. Recession, recovery, and state and local finances. Working Paper. Cambridge, MA: Lincoln Institute of Land Policy.

Keehan, Sean P., Andrea M. Sisko, Christopher J. Truffer, John A. Poisal, Gigi A. Cuckler, Andrew J. Madison, Joseph M. Lizonitz, and Sheila D. Smith. 2011. National health spending projections through 2020: Economic recovery and reform drive faster spending growth. Health Affairs 30(8): 1594–1605.

National Association of State Budget Officers. 2011. The fiscal survey of states. Washington, DC. http://nasbo.org/Publications/FiscalSurvey/tabid/65/Default.aspx

In the aftermath of the Great Recession, the financing of U.S. public elementary and secondary education has become particularly challenging, given the close link between school finance and property taxation. Across the nation, the sharp drop in housing prices that triggered the recession led to reductions in property tax revenues. Public schools derive more than 80 percent of their local own-source revenue from the property tax (McGuire, Papke, and Reschovsky 2015), and nearly half of total property tax dollars collected in the United States are used to finance public elementary and secondary education (U.S. Census Bureau 2014, U.S. Census Bureau 2013).

As a means of encouraging new research on these issues, the Lincoln Institute of Land Policy organized a conference on “Property Tax and the Financing of K–12 Education” in Cambridge, MA, in October 2013. The Fall 2014 issue of Education Finance and Policy features five of the conference papers along with two additional works submitted as part of the journal’s call for papers for the special issue, which underwent the journal’s peer review process. We served as guest editors, working closely with the journal’s editors, Thomas A. Downes and Dan Goldhaber. Thanks to funding from the Lincoln Institute, the special issue is available for free downloading until January 2016 from the website of the Association of Education Finance and Policy (www.aefpweb.org/journal/free-fall-2014).

Challenges for Funding K-12 Education

Using revenue data from the National Center for Education Statistics (2014), we determined that in real per pupil terms, total revenues devoted to public education fell by 6.2 percent from September 2008 to June 2012. Although comprehensive figures are not yet available for the most recent years, existing evidence points to a continued decline in financial support for public education. Data from the U.S. Census Bureau’s Quarterly Summary of State and Local Tax Revenue indicate that per capita real local government property tax revenues (for school and nonschool purposes) were 2.7 percent lower at the end of fiscal year 2014 than they were at the end of fiscal year 2011. And a survey conducted by the Center on Budget and Policy Priorities found that, in at least 35 states, real per-student state education aid was lower in fiscal year 2014 than in fiscal year 2008 (Leachman and Mai 2014).

Many school districts around the country responded to reduced revenues by laying off employees. In fact, the U.S. Bureau of Labor Statistics (2013) reports that between the employment peak in June 2009 and the trough in October 2012, education employment by local governments fell by 357,400—a decline of 4.4 percent. During this same period, public school enrollment grew by 0.9 percent (National Center for Education Statistics 2013).

Current projections signal significant increases in both K–12 enrollment and cost per pupil. The National Center for Education Statistics (NCES 2013) projects that per pupil expenditures will increase from an average of $10,518 in the 2009–10 school year to $12,530 in 2021–22. The NCES also projects substantial increases in public school enrollment, although growth projections for specific states vary and are generally much higher for the southern and western states (8.9 percent and 12.7 percent from 2010 to 2021) than for the Northeast and Midwest (2.2 percent and 2.4 percent). Although public policies and priorities can change, based on current policies and revenue projections, it is unlikely that revenues in support of public education will grow fast enough to match the projected growth in student enrollment and in costs.

National data indicate that in 2011–12, 10 percent of total public education revenue came from the federal government, with the rest split fairly evenly between state and local government sources (U.S. Census Bureau 2014). Federal government programs in support of education are classified as domestic discretionary expenditures. While to date Congress has done little to rein in the growth of spending on entitlement programs, it has mandated strict limits on the growth of domestic discretionary expenditures through the Budget Control Act of 2011 and the fiscal year 2014 Congressional budget agreement. The Congressional Budget Office (2013) predicts that, relative to GDP, domestic discretionary spending will decline through at least 2023. Given these overall spending caps, along with competition from other pressing domestic needs, reductions in real per pupil federal education support appear likely.

School funding systems vary tremendously across states, and future trends in state support for public education will differ greatly across states as well. However, many state governments face several long-run structural problems that are likely to constrain future state funding for public education. On the revenue side, many states have narrow sales tax bases that exclude many services and, as a result, fail to grow proportionally to their economies. The revenue problems are exacerbated by the inability of states to collect sales taxes on many Internet and mail order purchases. In the past few years, a number of states have adopted individual income tax cuts. These tax cuts have generally been enacted with no offsetting revenue increases, or they have been funded using revenue from one-time state budget surpluses.

On the spending side, funding for K–12 education must compete with other priorities. In many states, spending on Medicaid will grow faster than state tax revenues, a trend influenced in part by the aging of the population. Many states are also facing large and growing unfunded pension liabilities. Addressing these unfunded liabilities will undoubtedly require substantial increases in state government pension contributions. Although polls indicate that voters favor increased spending on education over spending in other areas, unless state governments make politically difficult decisions to increase taxes, states’ growing Medicaid and pension obligations may crowd out spending on K–12 education (Pew Research 2011).

With diminished prospects for growth in funding from federal and state governments, local school districts will likely play an increasingly important role in funding public education. Increasing local government funding for public education will require the politically difficult step of increasing property taxes, or, if that proves impossible, the development and widespread adoption of alternative sources of local government revenue. Neither strategy will be easy to implement.

This rather bleak picture of the prospects for public education funding raises a number of research questions. For example, can state governments adopt policies that would make the property tax more publicly acceptable? What role do alternative local sources of revenue play in funding public education? Can their role be increased? Is it possible to design state education aid systems that result in a more steady flow of state aid during economic downturns? Can state policies aimed at providing property tax relief be made more effective? Can state aid systems be reformed in ways that increase the educational opportunities of all students? The Property Tax and the Financing of K–12 Education considers these and other questions.

Conclusion

Three central themes emerge from this special issue. The first is the potential for unintended consequences to arise from state legislation. Eom et al. find that New York’s prominent property tax relief program, STAR, induces voters to increase school spending and raise property taxes, thereby undercutting much of the intended property tax relief. Jeffrey Zabel finds that property tax overrides in Massachusetts have led to increased racial segregation. And Phuong Nguyen-Hoang finds that the use of TIFs in Iowa has led to modest reductions in education spending.

A second theme is the potential for state school finance and property tax policies to provide greater advantages for high-wealth or high-income school districts than for low-wealth or low-income districts. In some cases, this pro-wealthy tilt is an explicit program feature. For example, the sales price differential adjustment factor in STAR channels a disproportionate amount of property tax relief to the wealthiest school districts. Likewise, Michigan’s state aid system sends about 7 percent more state aid per pupil to the wealthiest districts. In other cases, the tilt toward wealthier districts arises in more indirect ways. Chakrabarti et al. find that high-wealth school districts are likelier to increase property tax revenues in response to cuts in state aid. Zabel notes that higher income towns are more likely to pass property tax overrides. Nguyen-Hoang finds that TIFs have a greater negative effect on school spending in low-income or low-wealth districts than in high-income or high-wealth districts. Finally, Nelson and Gazley find that well-off districts are more likely to receive revenue from school-supporting nonprofits, and their per-pupil contributions tend to be higher.

A third theme is the enduring importance of the property tax as a funding source for public education in the United States. Papers by both Nelson and Gazley and by Downes and Killeen demonstrate that non-tax revenue plays a relative minor role in the funding of public schools. And no evidence suggests that the share of revenue from student fees and charges, school-supporting nonprofits, or from miscellaneous non-tax revenues has increased during or after the Great Recession.

These findings suggest that in order to ensure sufficient funding for public education into the future, efforts should be made to make the property tax a more appealing source of revenue. These property tax improvements might include the expansion of well-designed targeted property tax relief programs, such as circuit breakers, the adoption of property tax deferral programs for taxpayers facing high property tax burdens or rapid increases in their property tax bills, and improvements in tax administration that focus on increased transparency.

Given the great diversity in school finance and property tax systems across the U.S. and the fiscal challenges ahead, the papers in this special issue cannot possibly provide insights into the full range of policies needed to assure adequate and equitable funding for public education. However, it is our hope that these papers will be thought-provoking for both policy makers and researchers, and also inspire additional research on property taxation and school funding.

Contents

Introduction to Special Issue on the Property Tax and the Financing of K–12 Education
Daphne A. Kenyon and Andrew Reschovsky

Did Cuts in State Aid During the Great Recession Lead to Changes in Local Property Taxes?
Rajashri Chakrabarti, Max Livingston, and Joydeep Roy

Michigan and Ohio K–12 Educational Finance Systems: Equality and Efficiency
Michael Conlin and Paul Thompson

The Unintended Consequences of Property Tax Relief: New York’s STAR Program
Tae Ho Eom, William Duncombe, Phuong Nguyen-Hoang, and John Yinger

Unintended Consequences: The Impact of Proposition 2½ Overrides on School Segregation in Massachusetts
Jeffrey Zabel

Tax Increment Finance and Education Expenditures: The Case of Iowa
Phuong Nguyen-Hoang

The Rise of School-Supporting Nonprofits
Ashlyn Aiko Nelson and Beth Gazley

So Slow to Change: The Limited Growth of Non-Tax Revenues in Public Education Finance, 1991–2010
Thomas Downes and Kieran M. Killeen

About the Authors

Daphne A. Kenyon, Ph.D., is an economist who is a fellow at the Lincoln Institute of Land Policy and principal of D. A. Kenyon & Associates.

Andrew Reschovsky, Ph.D., is a fellow at the Lincoln Institute of Land Policy and a professor emeritus at the University of Wisconsin-Madison.

References

Congressional Budget Office. 2013. Updated Budget Projections: Fiscal Years 2013 to 2023. Washington, DC (May). www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf.

Leachman, Michael and Chris Mai. 2014. “Most States Funding Schools Less Than Before the Recession,” Washington, DC: Center on Budget and Policy Priorities, Updated September 12. www.cbpp.org/cms/index.cfm?fa=view&id=4011.

McGuire, Therese J., Leslie E. Papke, and Andrew Reschovsky. 2015. “Local Funding of Schools: The Property Tax and Its Alternatives,” chapter 22 in Handbook of Research on Education Finance and Policy, revised edition, edited by Helen F. Ladd and Margaret Goertz, Routledge, 376–391.

National Center for Education Statistics (NCES). 2014. “National Public Education Financial Survey Data,” School Year 2010–11. http://nces.ed.gov/ccd/stfis.asp.

National Center for Education Statistics (NCES). 2013. “Projections of Education Statistics to 2021.” http://nces.ed.gov/programs/projections/projections2021/index.asp.

Pew Research. 2011. “Fewer Want Spending to Grow, But Most Cuts Remain Unpopular.” Center for People and the Press. February 10. www.people-press.org/2011/02/10/fewer-want-spending-to-grow-but-most-cuts-remain-unpopular.

U.S. Bureau of Labor Statistics. 2013. Table B-1a: Employees on Non-Farm Payrolls by Industry Sector and Selected Industry Detail, Seasonally Adjusted. Current Employment Statistics, Establishment Data. www.bls.gov/web/empsit/ceseeb1a.htm.

U.S. Census Bureau. 2013. 2011 Annual Survey of State and Local Government Finance, State and Local Government Data. www.census.gov/govs/local/.

U.S. Census Bureau. 2014. 2012 Data, Public Elementary-Secondary Education Finance Data. www.census.gov/govs/school/.

This article reviews the Western State Planning Leadership Retreat, in which state planners from 13 western states have participated. The retreats provide a forum for state-level planners to compare their experiences, learn from each other’s successes and failures, and build a common base of experience for land use planning in their states and across the region. Rather than promote a particular approach to land use planning and growth management, the retreats encourage planners to explore a range of land use planning strategies for responding to growth and land use issues in the West. This article summarizes what we learned during the first two retreats in 2000 and 2001.

Forces and trends of land use planning. The West is changing and there are many differences in the states’ approach to land use planning. New forces and trends are redefining the region’s quality of life, communities, and landscapes—directly influencing how we approach land use planning and growth management. Within these trends, western state planners recognize a variety of common challenges—pockets of explosive population growth, sprawl, drought, out-of-date legislation, a lack of funding, and a lack of public and political support for planning, and changing the way development occurs.

Major themes related to land use planning and growth in the West;

Why plan? How can we build public and political support for planning? Historically, land use planning was motivated by a concern to promote orderly development of the landscape, preserve some open spaces, and provide consistency among developments. These continue to be important objectives, but they are insufficient for building public and political support.

What is the role of state government? State programs should support local land use planning efforts, and should try to engage the “big players,” such as transportation departments, to work with local jurisdictions and maintain their state’s economic competitiveness by encouraging local communities to improve their quality of life through infill, redevelopment, and preserving the natural environment.

How can regional approaches to land use planning complement state actions? Regionalism allows multiple jurisdictions to share common resources and manage joint services, such as water treatment facilities and roads. Regional approaches are gaining momentum, but they also create new challenges.

Foster effective planning and growth management through collaboration. Collaboration can be defined many ways, but most planners agree with the premise that if you bring together the right people with good information they will create effective, sustainable solutions to their shared problems. Collaboration, when done correctly, allows the people most affected by land use planning decisions to drive the decisions.

How do we measure success? In 1998, the Arizona legislature passed the Growing Smarter Act, which was amended in 2000, and created a Growing Smarter Commission. The act reformed land use planning and zoning policies and required more public participation in local land use planning. This brings us full circle to our first theme—Why are we planning?

The Three Cs of Planning—three recommendations emerge from the western state planners’ retreats that can be implemented throughout the country. First, identify the most compelling reason to plan in your community; second, rely on collaborative approaches; third, foster regional connections.

“This [the West] is the native home of hope. When it fully learns that cooperation, not rugged individualism, is the quality that most characterizes and preserves it, then it will have achieved itself and outlived its origins. Then it has a chance to create a society to match its scenery.”

Wallace Stegner, The Sound of Mountain Water (Penguin Books 1980, 38)

During the past two years, state planners in 13 western states have met in the Western State Planning Leadership Retreat, an annual event sponsored by the Lincoln Institute of Land Policy and the Western Consensus Council. Cosponsors include the Western Governors’ Association, the Council of State Governments–WEST, and the Western Planners’ Association. The retreats provide a forum for state-level planners to compare their experiences, learn from each other’s successes and failures, and build a common base of experience for planning in their states and across the region. Rather than promote a particular approach to planning and growth management, the retreats encourage planners to explore a range of strategies for responding to growth and land use issues in the West. This article summarizes what we have learned during the first two retreats in 2000 and 2001.

Forces and Trends

The West is changing. New forces and trends are redefining the region’s quality of life, communities and landscapes, directly influencing how we approach land use planning and growth management. One force that sets the West apart from other regions of the country is the overwhelming presence of the landscape. The West has more land and fewer people than any other region, yet is also very urbanized. More people live in urban centers than in rural communities.

The dominance of land in the politics and public policy of the West is due in part to the large amount of land governed by federal and tribal entities (see Figure 1). More than 90 percent of all federal land in the U.S. lies in Alaska and the 11 westernmost contiguous states. The U.S. Forest Service, U.S. Bureau of Land Management, National Park Service, and the U.S. Fish and Wildlife Service manage most of the West’s geography and significantly influence the politics of land use decisions. Indian tribes govern one-fifth of the interior West and are key players in managing water, fish and wildlife.

The West is also the fastest growing region of the country (see Figure 2). The five fastest-growing states of the 1990s were Nevada, Arizona, Colorado, Utah and Idaho. Between 1990 and 1998, the region’s cities grew by 25 percent and its rural areas by 18 percent, both significantly higher rates than elsewhere in the U.S. As western demographics diversify, the political geography has grown remarkably homogeneous. Following the 2000 elections, Republicans held three-quarters of the congressional districts in the interior West (see Figure 3) and all governorships except the coastal states of California, Oregon and Washington.

Within these trends, western state planners recognize a variety of common challenges—pockets of explosive population growth, sprawl, drought, out-of-date legislation, a lack of funding, and a lack of public and political support for planning and changing the way development occurs in the West. They also point out many differences in their states’ approaches to planning. Oregon and Hawaii have long-standing statewide land use planning efforts, but planning in Nevada is a recent phenomenon, limited mainly to the Las Vegas and Reno areas. Vast federal holdings in Nevada, Idaho and Utah dictate land use management more than in other states, and Arizona and New Mexico share planning responsibilities with many sovereign tribal governments. Alaska and Wyoming—with small populations and little or no growth—do very little planning.

Major Themes

Based on the first two retreats, we have identified six major themes related to planning and growth in the West.

Why plan? How can we build public and political support for planning? Historically, planning was motivated by a concern to promote orderly development of the landscape, preserve some open spaces, and provide consistency among developments. These continue to be important objectives, but they are insufficient for building public and political support. Particularly during economic recession, planning takes a back seat—the public can focus on only so many problems at once. Today, the most compelling argument for planning is that it can be a vehicle to promote economic development and sustain the quality of life. People move to the West and create jobs because they like the quality of life in the region, and planners need to tap into this motivation.

In Utah, for example, quality of life is an economic imperative, so state planners tie their work to enhancing quality of life rather than to limiting or directing growth. It is used to integrate economic vitality and environmental protection. Several years ago, business leaders and others created Envision Utah, a private-public partnership. Participants use visualization techniques and aerial photos, mapping growth as it might occur without planning, and then again under planned cluster developments with greenbelts and community centers. These “alternative futures” scenarios help citizens picture the changes that are coming and the alternatives for guiding those changes in their communities. As Utah’s state planner says, “Growth will happen, and our job is to preserve quality. That way, when growth slows, we will still have a high quality of life.”

Kent Briggs, executive director for the Council of State Governments–WEST (a regional association for state legislators), and Jim Souby, executive director of the Western Governors’ Association, acknowledge the difficulty of nurturing public and political support for growth management in the West. They agree that political power shifts quickly from one party to the other, and yet is a lagging indicator of cultural, demographic and economic change. Governors and legislators might be more convinced to support land use planning, they say, by using visualization techniques to help them understand the costs of existing patterns of development, and to picture the desired future of our communities and landscapes.

How much planning is enough, and who should be in the driver’s seat? Arizona and Colorado have smart growth programs designed to help communities plan for growth and preserve open space. In the November 2000 elections, citizen initiatives in both states introduced some of the nation’s most stringent planning requirements, but both initiatives failed by a 70 to 30 percent vote, suggesting that citizens want to maintain flexibility and freedom—and local control—when it comes to planning and growth management. The story is similar in Hawaii, where business profitability—not zoning maps—directs land use. In May 2001, Hawaii’s governor vetoed a smart growth initiative because it was perceived as being too environmental and would limit developers’ ability to convert agricultural lands.

This emphasis on home rule or local control is supported by a recent survey of citizens in Montana, conducted by the Montana Association of Realtors. In the survey, 67 percent of respondents said that city or county governments should have the power to make land use decisions, while 60 percent opposed increasing state involvement in managing growth-related problems.

In Oregon, citizens narrowly passed Measure 7, an initiative requiring state and local governments to pay private property owners for any regulations that restrict the use or reduce the value of real property. While the impacts and constitutionality of this initiative are still being debated, it sends a strong message to planners in a state that has had one of the most progressive land use and growth management programs for 25 years. The message, according to Oregon’s state planner, is to not rest on your successes, and to keep citizens and communities engaged in an ongoing discussion about the effectiveness of land use planning. He also stressed the need to balance preservation with appropriate development, emphasizing that “good planning doesn’t just place limits on growth and development.”

What is the role of state government? Douglas Porter, keynote speaker at the first retreat and a nationally known consultant on land use and growth policy, says that one of the most important state roles is to offset the lack of will to plan at the local level. He says that state programs should support local planning efforts, and should try to engage the “big players,” such as transportation departments, to work with local jurisdictions. Porter also suggests that state governments can maintain their state’s economic competitiveness by encouraging local communities to improve their quality of life through infill, redevelopment, and preserving the natural environment.

Oregon’s state government attracted $20 million in federal funding to help communities overhaul zoning ordinances and remove obstacles to mixed uses. Colorado created an Office of Smart Growth to provide technical assistance on comprehensive planning; document best practices for planning and development; maintain a list of qualified mediators for land use disputes; and provide grants for regional efforts in high growth areas. In Arizona, Montana and New Mexico, state planning offices provide a range of technical services to assist communities, such as clarifying state laws, promoting public participation, and fostering intergovernmental coordination.

Jim Souby suggests that one of the most effective roles of state government is to promote market-based strategies and tax incentives. “Tax what you don’t like, subsidize what you do like,” Souby says. Other incentives might include cost sharing and state investment strategies—similar to Maryland and Oregon—to drive development in a positive direction.

How can regional approaches to land use planning complement state actions? Regionalism allows multiple jurisdictions to share common resources and manage joint services, such as water treatment facilities and roads. In Washington, citizens recently rejected the top-down smart growth model popularized in Florida due to concerns over home rule and private property rights. In response, the state legislature approved a system of regional planning boards that instill some statewide consistency while allowing for regional and local differences.

Nevada, despite double-digit growth in the Las Vegas and Reno areas, does not have a state planning office. However, the legislature mandated Washoe County (home of Reno and Sparks) to create a regional planning commission to address growth issues jointly rather than in a piecemeal manner. Key municipal and county officials in Clark County (Las Vegas) formed their planning coalition voluntarily—compelled to cooperate by the highest growth rate in the nation. This coalition recently presented the state legislature with a regional plan that emphasizes resolving growth issues locally rather than at the state level.

In New Mexico, the city and county of Santa Fe each recently updated their comprehensive land use plans. The plans were fine, except that they were stand-alones prepared with no coordination. Citizens demanded better integration of planning efforts and pushed for a new regional planning authority. Within 18 months, citizens and officials developed a joint land use plan for the five-mile zone around the city, and the regional authority is now developing zoning districts and an annexation plan. In Idaho, city and county officials in Boise voluntarily created the Treasure Valley Partnership as a forum to discuss policies for controlling sprawl, and to coordinate the delivery of services. They are also reviewing the possibility of light rail development.

Regional approaches are gaining momentum, but they also create new challenges. For example, the city of Reno has been reluctant to join the neighboring city of Sparks and Washoe County in revising their regional plan. With no enforcement or penalty at the state level, the other jurisdictions can do little to encourage Reno’s involvement. Likewise, New Mexico has no policy framework for regional planning and thus no guidelines on how to share taxing authority, land use decision making and enforcement responsibilities.

Foster effective planning and growth management through collaboration. Collaboration can be defined many ways, but most planners agree with the premise that if you bring together the right people with good information they will create effective, sustainable solutions to their shared problems. Collaborative forums allow local officials to weigh and balance competing viewpoints, and to learn more about the issues at hand. According to Jim Souby, local efforts should incorporate federal land managers because they play such a dominant role in the region’s political geography. Kent Briggs agrees that collaboration, when done correctly, allows the people most affected by land use decisions to drive the decisions. Collaborative processes, when they include all affected interests, can generate enormous political power, even when such efforts do not have any formal authority. While it may be appropriate in some cases to have national or state goals, it is ultimately up to the people who live in the communities and watersheds of the West to determine their future, according to Briggs.

How do we measure success? In 1998, the Arizona legislature passed the Growing Smarter Act, which was amended in 2000, and created a Growing Smarter Commission. The act reformed land use planning and zoning policies and required more public participation in local planning. The commission recommended that the state should monitor and evaluate the effectiveness of land use planning on an ongoing basis. The governor recently appointed an oversight council to continue this work, but council members say that clear benchmarks are needed against which to evaluate the effectiveness of land use planning—a percentage of open space preserved, for example, or a threshold on new development that triggers tighter growth restrictions. Arizona law, however, simply identifies the issues that must be addressed in comprehensive land use plans. It does not set specific standards or expectations, making meaningful evaluation impossible. This brings us full circle to our first theme—Why are we planning?

The Three Cs of Planning

Three recommendations emerge from the western state planners’ retreats that can be implemented throughout the country.

First, identify the most compelling reason to plan in your community. What are you trying to promote, or prevent? Be explicit about the values driving the planning process. Emphasize the link between quality of life, economic development and land use planning as a way to sustain the economy and the environment. Remember that people must have meaningful reasons to participate constructively in the planning process.

Second, rely on collaborative approaches. Engage the full range of stakeholders, and do it in a meaningful way. A good collaborative process generates a broader understanding of the issues—since more people are sharing information and ideas—and also leads to more durable, widely supported decisions. Collaboration may also be the most effective way to accommodate the needs and interests of local citizens within a regional approach and when the state’s role is limited.

Third, foster regional connections. Recognize that planning is an ongoing process, not a product to be produced and placed on a shelf. Link the present to the future using visualization and alternative futures techniques. Build monitoring and evaluation strategies into plan implementation. Encourage regional approaches that build on a common sense of place and address transboundary issues. Emphasize that regionalism can lead to greater efficiencies and economies of scale by coordinating efforts and sharing resources.

Matthew McKinney is executive director of the Western Consensus Council in Helena, Montana, a nonprofit organization that helps citizens and officials shape effective natural resource and other public policy through inclusive, informed and deliberative public processes. Will Harmon is the communications coordinator for the Western Consensus Council and a freelance writer based in Helena.

References

Center for Resource Management. 1999. The Western Charter: Initiating a Regional Conversation. Boulder, CO: Center for Resource Management.

Kwartler, Michael. 1998. Regulating the good you can’t think of. Urban Design International 3(1):13-21.

Steinitz, Carl and Susan McDowell. 2001. Alternative futures for Monroe County, Pennsylvania: A case study in applying ecological principles, in Applying Ecological Principles to Land Management, edited by Virginia H. Dale and Richard A. Haeuber. New York, NY: Springer-Verlag, 165-189.

Swanson, Larry. 1999. The emerging ‘new economy’ of the Rocky Mountain West: Recent change and future expectation. The Rocky Mountain West’s Changing Landscape 1(1):16-27.

U.S. Environmental Protection Agency. 2000. Environmental Planning for Communities: A Guide to the Environmental Visioning Process Utilizing a Geographic Information System (GIS). (September).

Una versión más actualizada de este artículo está disponible como parte del capítulo 7 del CD-ROM Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Claudia De Cesare es asesora en materia de impuesto predial para la Secretaría de Finanzas del municipio brasileño de Porto Alegre y se desempeña como docente del área de valoración y tributación predial en el programa de posgrado de la Universidad Federal de Río Grande do Sul en Puerto Alegre. Lleva más de cinco años participando en el diseño de cursos y desempeñándose como instructora en el Programa para América Latina del Instituto Lincoln. Además pertenece al consejo asesor del Instituto Internacional de Impuesto predial (IPTI) y se desempeñó como directora técnica del Instituto Brasileño de Avalúos y Peritaje (IBAPE).

Land Lines: Porto Alegre goza de renombre internacional por su innovadora administración local democrática. ¿Qué hace única a esta ciudad en comparación con otras en Brasil o América Latina?

Claudia De Cesare: En efecto, Porto Alegre ha sido pionera en muchas acciones de la administración pública, entre las que se encuentran: el uso del impuesto predial como instrumento para la recuperación de plusvalías, la venta de los derechos de construcción (solo criado), el uso de los derechos de construcción en lugar de dinero en efectivo para pagar las expropiaciones de bienes raíces y la recaudación de rentas a cambio del uso de espacio público para redes de infraestructura, como son las de telecomunicaciones, de televisión por cable y de gas. Por ejemplo, cinco años antes de la aprobación de la legislación nacional del Estatuto de la Ciudad que reglamentaba el uso de tasas progresivas para el impuesto predial, Porto Alegre había aprobado una legislación local en esa materia. Si bien la Corte Suprema posteriormente falló en contra de esta medida local y a favor de la necesidad de una legislación nacional, la ciudad ha jugado un papel protagónico en la promoción del debate sobre muchos temas controvertidos, como son los derechos privados, los derechos de propiedad y los intereses públicos.

Creo que entre las razones que han hecho posibles estas innovaciones en Porto Alegre están una clara definición de las políticas y los objetivos por lograr, así como las “agallas” de los dirigentes locales para afrontar los problemas, incluso cuando ello pueda provocar conflictos. En los funcionarios públicos ha prevalecido la visión de que la ciudad debe planearse de forma democrática para beneficio de la comunidad en general y la convicción de que los bienes públicos deben tomarse con seriedad. No todas las iniciativas han tenido éxito, pero los ciudadanos ahora entienden mejor las responsabilidades y limitaciones del gobierno local. El hecho de que un partido político, en este caso el Partido de los Trabajadores (PT), resultara elegido para conducir el gobierno de la ciudad durante más de 15 años consecutivos también contribuyó a la continuidad y coherencia de estas medidas públicas. Este tipo de legado político es bastante inusual en Brasil y en América Latina en general.

LL: ¿Cómo ha afectado esta atmósfera proactiva la administración del impuesto predial?

CD: Podemos identificar dos períodos en lo que respecta al comportamiento del impuesto predial en Porto Alegre. Antes de 1989, los ingresos locales provenientes del impuesto predial seguían el mismo patrón que en el resto de América Latina. Era más bien simbólico, caracterizado por un bajo grado de esfuerzo en la administración, negligencia en la recaudación de los impuestos locales y dependencia extrema de las transferencias de ingresos desde la instancia nacional y estatal. Luego de reformas radicales en el impuesto predial que modificaron las políticas de exención, introdujeron tasas progresivas y estipularon una nueva lista de avalúo, la tasa de recaudación del impuesto predial aumentó en más del 300% en los primeros dos años. Una amplia campaña educativa pública hacía hincapié en los argumentos para pagar regularmente el impuesto predial, la importancia de dicho impuesto para la dotación de servicios públicos y las razones por las que las autoridades locales no tolerarían la evasión fiscal.

Un cambio en la actitud por parte del gobierno de la ciudad condujo asimismo a una aplicación más eficaz de la ley en lo que respecta a los pagos del impuesto predial y las medidas jurídicas para abordar el problema de la evasión fiscal o las disputas sobre los avalúos. Se dejó claro que no habría amnistía para las deudas por concepto de impuesto predial. El proceso de presupuesto participativo igualmente contribuyó a la rehabilitación del impuesto predial en Porto Alegre, ya que aumentó la confianza general en la administración pública (véase el artículo de Goldsmith y Vainer, de 2001). Desde principios de los años 1990, las rentas anuales recaudadas por concepto de impuesto predial se han mantenido estables y representan casi el 0,95% del PIB local. En comparación, en la esfera nacional, el impuesto predial apenas representa aproximadamente el 0,5% del PIB. No se han realizado mejoras subsecuentes en el impuesto predial, básicamente porque el poder legislativo ha rechazado varias propuestas tanto para reformas como para revisiones drásticas.

LL: ¿Qué importancia tiene el impuesto predial para América Latina?

CD: Aunque la respuesta sencilla a esa pregunta es “depende de cada país”, este impuesto no es una fuente significativa de ingresos en ningún país latinoamericano, si bien en la mayoría de los países los sistemas de impuesto predial llevan tiempo establecidos. Sólo en Argentina y Uruguay las rentas provenientes del impuesto predial representan más del 1% del PIB. En Brasil el resultado promedio se acerca al 0,5% y en México y Costa Rica se ubica alrededor del 0,3% del PIB. Más aún, en cifras relativas, existe una gran variabilidad en la importancia del impuesto predial en los países y ciudades que no se explica directamente por el PIB local ni el tamaño de la población. Parte de los resultados depende de la voluntad política, la cual varía enormemente de una ciudad a otra.

LL: En su opinión, ¿cuáles son los principales puntos controvertidos en lo que refiere a la recaudación del impuesto predial?

CD: Diría que entre los puntos controvertidos se encuentran los objetivos reales por lograr con este impuesto, el grado de universalidad en su implementación, los cambios que se necesitan para tomar en cuenta las inquietudes sociales, económicas y culturales, y la distribución de la carga tributaria para reglamentar el impuesto según la capacidad de pago. Con respecto a la capacidad de pago, sobre todo en Brasil, hay mucha discusión sobre la aplicación de tasas progresivas que varían según la cuantía de los avalúos. La cuestión subyacente pudiera estar en lo simple que debiera ser el sistema.

Otras cuestiones tienen que ver con la falta de consenso acerca de la transparencia del sistema, la autonomía local frente al sistema nacional de recaudación de impuestos y la inestabilidad política y económica en general que afecta los mapas del valor de las propiedades y otros datos. Más aún, la divulgación pública de información sobre el impuesto predial, como son las características de las propiedades individuales, los valores estimados en los avalúos y los pagos anuales del impuesto, no siempre se considera segura.

LL: ¿Qué se necesitaría para mejorar la recaudación del impuesto predial?

CD: Según mi experiencia, el éxito en la aplicación del impuesto predial depende de una combinación de políticas fiscales adecuadas, un marco jurídico coherente para la recaudación de los impuestos y una estructura administrativa eficaz. Por ejemplo, es probable que la aplicación de (altas) tasas confiscatorias en predios vacantes para promover el desarrollo urbanístico más bien estimule la evasión de impuestos. Por otra parte, son indispensables la voluntad política y la capacidad de negociación con los actores para introducir reformas o revisiones en la administración tributaria. Probablemente el índice de recaudación mejorará cuando los contribuyentes vean más claramente la conexión entre los servicios públicos y las rentas recaudadas por concepto de impuesto predial. En otras palabras, la función del impuesto predial mejoraría si la comunidad está acostumbrada a pagar dicho impuesto y entiende su efecto en la mejora de los servicios públicos. Finalmente, con una tendencia hacia una cultura fiscal participativa –en la cual la comunidad se involucra en las decisiones sobre la recaudación de impuestos y los gastos públicos– se podría aumentar la aceptación del impuesto, lo que facilitaría la recaudación.

LL: ¿Qué está cambiando en la región que ejerza influencia sobre las posibilidades de reforma fiscal?

CD: Creo que actualmente los administradores tributarios entienden y se interesan más en el impuesto predial. Están conscientes de la necesidad apremiante de aumentar las rentas a través de una mejor aplicación del impuesto, a pesar de los desafíos que plantean su alta visibilidad y sus antecedentes históricos de funcionamiento deficiente. Asimismo saben de la necesidad de romper este paradigma, en relación tanto con las expectativas de los contribuyentes como con el papel que juega el impuesto predial dentro del sistema tributario nacional. Varias experiencias aisladas, pero prometedoras, han dejado en claro que la reforma del impuesto predial en América Latina es viable, si bien requiere voluntad política, innovación y disposición para superar las barreras s vislumbradas en su implementación.

LL: ¿Cuáles son las principales diferencias en el entorno del impuesto predial de América Latina en comparación con Norteamérica?

CD: Los sistemas de Estados Unidos y Canadá ciertamente son más maduros y transparentes que la mayoría de los sistemas latinoamericanos, más que todo porque la información está disponible y es de dominio público y porque existe fácil acceso a la tecnología. Algunas de las diferencias más importantes observadas en América Latina son los patrones de ocupación ilegal, la falta de información confiable sobre la tenencia de la tierra, el gran número de transacciones inmobiliarias informales y el predominio de la construcción progresiva de viviendas. Todas estas características del uso del suelo en América Latina plantean desafíos distintos para diseñar procedimientos para hacer los avalúos inmobiliarios y administrar una política tributaria justa y coherente. En cuanto al uso de la tecnología en la administración del impuesto predial, el año pasado supe de un sistema catastral en México que es tan eficaz como los mejores sistemas usados en Estados Unidos. No obstante, es un caso atípico; existe gran variación en el uso de tecnología entre las distintas autoridades locales en América Latina.

LL: Con base en su investigación, ¿cuáles son algunos de los efectos positivos y negativos de cambiar a un sistema tributario basado en el valor del suelo para las propiedades residenciales?

CD: La conclusión de mi estudio fue bastante inesperada, ya que la hipótesis respaldaba el argumento opuesto. A partir de una base de datos de Porto Alegre, descubrí que el resultado principal de usar el valor del suelo como base del impuesto era la tendencia hacia mayor regresión en la distribución de la carga tributaria, por lo que las viviendas de menor precio quedaban claramente identificadas como los posibles perdedores. El hecho de que parte de la carga tributaria fuera transferida de las propiedades de precio alto a las de precio más bajo es un verdadero motivo de preocupación. No obstante, es necesario profundizar la investigación para solucionar las imperfecciones en el modelo de avalúo usado para estimar el valor del suelo y examinar otras bases de datos. En todo caso, se identificó la falta de conocimientos sobre el uso del valor del suelo como base del impuesto y sus ventajas predecibles como principal obstáculo para su aplicación en Brasil.

LL: ¿Cómo usa usted diversos instrumentos y técnicas de valoración para determinar el valor del suelo?

CD: Uno de los argumentos en contra del uso del valor del suelo como base del impuesto es la gran dificultad para estimar el valor de los predios con mejoras. En mi estudio, se descubrió que era viable usar modelos hedonistas (MRA) para estimar el valor del suelo. Para compensar la falta de datos sobre los predios no urbanizados en áreas sumamente desarrolladas (áreas centrales y distritos comerciales), utilicé un número razonable de viviendas que fueron vendidas para nuevos desarrollos urbanísticos. El valor de mercado de estas viviendas se determinó enteramente a través del potencial que tenía el predio para desarrollo futuro, así como de las características del vecindario. En consecuencia, los hallazgos respaldan la hipótesis de que posibles dificultades en el avalúo no impiden usar el valor del suelo como base para el impuesto predial, por lo menos en el caso de Porto Alegre. No obstante, se observó un grado menor de uniformidad en los avalúos de predios no desarrollados, puesto que los precios de los predios tienden a sufrir fuertes variaciones fortuitas y están muy influenciados por las características particulares del comprador y el vendedor involucrados en cada transacción.

LL: ¿Cuáles son, en su opinión, los mayores desafíos que enfrenta América Latina en los próximos cinco años?

CD: Como dije antes, uno de los mayores desafíos es lograr sistemas de impuestos prediales más eficaces. Creo que la promoción e implementación de programas nacionales de mejoramiento del impuesto predial es indispensable para fortalecer dicho impuesto en la esfera local. En un tono más personal, mi objetivo es crear un sistema basado en Internet para recabar y difundir información sobre el impuesto predial en América Latina, lo que permitiría hacer análisis comparativos entre las municipalidades según criterios predefinidos. Con este sistema los administradores del impuesto predial llenarían los datos sobre el funcionamiento de dicho impuesto de manera regular, lo que haría posible tener evaluaciones constantes. Sería un gran avance para el proyecto, ahora con respaldo del Instituto Lincoln, el cual utiliza actualmente cuestionarios convencionales para monitorear la información sobre el impuesto predial en la región.

Referencia

Goldsmith, William W. y Carlos B. Vainer. 2001. Presupuesto participativo y políticas de poderes en Porto Alegre. Publicado en el volumen 13 (1) de la revista Land Lines: 7–9.

Daphne Kenyon, a visiting fellow at the Lincoln Institute of Land Policy, heads D. A. Kenyon & Associates, a public policy consulting firm in Windham, New Hampshire. She also serves on the New Hampshire State Board of Education, to which she was appointed by Governor John Lynch (D) in 2006. Kenyon is writing a policy focus report for the Institute, titled Untying the Property Tax–School Funding Knot, which will be available in the fall of 2007.

Hace más de 50 años, un proceso lento pero fundamental comenzó a transformar el impuesto sobre la propiedad en los Estados Unidos. Como este proceso se desarrolló a nivel estatal y local, y no a nivel federal, y dado que la adopción casi universal del avalúo preferencial tomó varias décadas, la mayoría de los ciudadanos no son conscientes de que los dueños de parcelas rurales a menudo reciben un tratamiento preferencial. En consecuencia, hoy millones de hectáreas de suelo rural se avalúan muy por debajo de su valor justo de mercado a efectos del impuesto local sobre la propiedad.

Estas modificaciones del impuesto sobre la propiedad comenzaron en Maryland en 1957, cuando la Asamblea General promulgó una ley de avalúo de suelos de uso agrícola. Esta ley estableció que los campos y pastizales se podían avaluar por debajo del precio del mercado, siempre y cuando se “utilizaran activamente” con fines agrícolas. Como prueba de uso agrícola activo, un dueño sólo tiene que demostrar que la propiedad generó US$2.500 o más de ingresos brutos anuales por la venta de productos agrícolas en los últimos años.

Varios factores impulsaron a docenas de gobiernos estatales a emular a Maryland y crear programas de avalúo por valor de uso (use value programs, o UVA) en las décadas de 1960 y 1970. El primero fue la expansión masiva de las regiones metropolitanas de los EE.UU. después de la Segunda Guerra Mundial, que provocó la conversión de decenas de millones de hectáreas de suelos agrícolas, ganaderos, forestales y otros suelos rurales a uso residencial y a otros usos no agrícolas. Alig et al. (2003) estima que el área desarrollada del país aumentó más del doble entre 1960 y 1997, de 10,3 a 26,5 millones de hectáreas. La rápida urbanización del suelo rural había llegado antes a Maryland que a otros estados debido a que la población de los condados de Montgomery y Prince George, cerca de la rápidamente creciente capital del país, Washington, DC, se cuadruplicó entre 1940 y 1960.

El segundo factor fue que el suelo agrícola que se encontraba al borde de las áreas metropolitanas aumentó significativamente de precio en las décadas posteriores a la guerra debido a su potencial de desarrollo inmobiliario, por lo que algunos productores rurales se vieron obligados a pagar facturas de impuestos mucho mayores debido al mayor valor de sus suelos. Entre 1950 y 1971, por ejemplo, se produjo un incremento del 330 por ciento en la relación de precios de suelos agrícolas con ingresos agrícolas netos en Maryland (Gloudemans 1974). Un estudio en dos estados y siete condados de la región de Kansas City a comienzos de la década de 1960 encontró que la proporción de ingresos brutos agrícolas absorbida por el impuesto sobre la propiedad en el condado más urbanizado era cuatro veces mayor que en la región metropolitana en su totalidad (Blase y Staub 1971). Por lo tanto, la adopción de un avalúo preferencial para el suelo rural se justificó frecuentemente como una medida política para proteger a las familias de agricultores y ganaderos de penurias económicas o, incluso, la ruina.

Una tercera razón, más sutil, de la adopción de programas UVA, tiene que ver con la manera en que el impuesto sobre la propiedad había sido administrado en muchos estados antes de 1957. Hasta ese momento en la historia de los EE.UU., los valuadores municipales y de condado habían otorgado preferencias tributarias de facto a los agricultores, a pesar de que las cláusulas constitucionales estatales exigían uniformidad y equidad en la tributación. Estas prácticas informales de avalúo tenían como objetivo proporcionar alivio tributario a “ciudadanos que se lo merecían”, pero producían como efecto secundario diferencias considerables en los avalúos de propiedades dentro de la misma comunidad.

La expansión de los programas de ayuda estatal a los gobiernos locales después de la Segunda Guerra Mundial puso al descubierto algunas de estas discrepancias. La cantidad de propiedades por residente o estudiante era frecuentemente un factor importante para determinar las fórmulas utilizadas para la asignación de subsidios estatales. Por lo tanto, creció la presión a nivel estatal para adoptar prácticas locales uniformes de avalúo, con el fin de asegurar una distribución equitativa de subsidios estatales. La eliminación de las preferencias tributarias de facto otorgadas por los valuadores a los agricultores y ganaderos dentro de sus comunidades aceleró los esfuerzos para obtener preferencias tributarias de jure para los suelos rurales, por medio de leyes estatales o enmiendas constitucionales.

California fue uno de los estados que adoptó inicialmente el avalúo por valor de uso para los suelos rurales. En 1965, el poder legislativo aprobó la Ley de Conservación de Suelos de California, comúnmente llamada la Ley Williamson. El objetivo de esta ley era la preservación del suelo rural para poder asegurar un suministro adecuado de alimentos, desalentar la conversión prematura de suelos rurales a uso urbano, y preservar las propiedades agrícolas debido a su valor como espacio abierto.

La Ley Williamson permite a condados y ciudades ofrecer un avalúo preferencial al dueño de un suelo agrícola, condicionado a un contrato que prohíbe el desarrollo del suelo por un mínimo de diez años. Después de la primera década del contrato, este se prolonga automáticamente cada año a menos que el dueño presente una notificación de no renovación de contrato. Una vez presentada esa notificación, el avalúo de la propiedad aumenta anualmente hasta que alcance su valor justo de mercado, y el contrato vence finalmente después de nueve años.

Diversidad y alcance de los programas de avalúo por valor de uso

Con poca repercusión en los medios de comunicación nacionales, el avalúo preferencial de los suelos rurales se ha convertido en una característica fundamental de los impuestos locales sobre la propiedad en los Estados Unidos. En California, por ejemplo, más de 6,7 millones de hectáreas de suelo agrícola se acogieron a los contratos de la Ley Williamson en 2008-2009. Según el Departamento de Conservación de California, las propiedades sujetas a la Ley Williamson constituían casi un tercio de todos los suelos privados a comienzos de 2009.

Más de 6,5 millones de hectáreas de suelos agrícolas en Ohio estaban inscritas en el programa de Valor de Uso Agrícola Actual (CAUV, por sus siglas en inglés) para 2007. En promedio, estos suelos se habían valuado en sólo un 14,2 por ciento de su valor de mercado. En diciembre de 2011, la Sala de Representantes de Ohio votó por unanimidad a favor de ampliar el programa CAUV del estado para incluir suelos utilizados para la producción de energía por biomasa y biodiésel.

En Nueva Hampshire, se inscribieron 1,2 millones de hectáreas en el programa estatal de avalúo por uso vigente en 2010. Estas parcelas valuadas en forma preferencial constituían más del 51 por ciento del área total de suelos del estado. Como la agricultura desempeña un papel menor en la economía de Nueva Hampshire, más del 90 por ciento de estos suelos sin desarrollar son bosques y humedales, no campos agrícolas ni pasturas.

Dado que las circunstancias económicas, políticas y legales varían sustancialmente entre los 50 estados, no es sorprendente que los gobiernos estatales hayan adoptado programas UVA diversos. En 1977, once estados ya habían creado programas en los cuales las parcelas elegibles quedaban inscritas automáticamente. En otros 38 estados, los programas requerían que los propietarios presentaran solicitudes de avalúo preferencial. Casi todos los estados ofrecían avalúos por debajo del valor de mercado para suelos agrícolas, pero sólo 21 estados extendían avalúos preferenciales para suelos madereros y bosques.

Desde el punto de vista de la conservación de suelos, la diferencia más importante entre los estados es que 15 de ellos no imponen penalizaciones si un dueño convierte su propiedad a un uso no calificado (ver figura 1). Otros siete estados exigen la devolución de un porcentaje del desarrollo inmobiliario efectuado en parcelas inscritas en el programa. Es decir, el propietario tiene que pagar al estado o al municipio un porcentaje del valor de mercado de la parcela en el año en que se desarrolla la propiedad.

Mucho más común es la penalización de reversión, un disuasión del desarrollo que exige al dueño que pague la diferencia entre el impuesto sobre la propiedad efectivamente pagado en los últimos años gracias al avalúo por valor de uso, y el impuesto que hubiera pagado en esos años si el avalúo hubiera sido efectuado al valor de mercado (más los intereses acumulados por dicha diferencia, en algunos casos). Veintiséis estados utilizan esta forma de penalización al desarrollo inmobiliario. Las investigaciones económicas han demostrado que la falta de penalizaciones al desarrollo inmobiliario debilita significativamente la capacidad de un programa UVA para demorar el desarrollo de suelos rurales que se encuentran en el borde de las regiones metropolitanas (England y Mohr 2006).

La práctica de avalúo por valor de uso a veces crea tensiones políticas en la comunidad e incluso puede dañar la legitimidad de la tributación sobre la propiedad como fuente de ingresos locales. En noviembre de 2011, una estación de televisión de Wisconsin reportó que los dueños de lotes vacantes en una subdivisión residencial de lujo habían cosechado malas hierbas en sus parcelas y solicitado con éxito un avalúo agrícola para sus lotes, mientras la construcción estaba pendiente. Este alegato hizo que por lo menos un representante estatal solicitara la realización de audiencias legislativas por abuso del programa de avalúo por valor de uso del estado. Según el representante Louis Molepske, “Esto debería molestar a todos los habitantes de Wisconsin porque han sido engañados por aquellos que… [quieren] transferir injustamente la carga de los impuestos sobre la propiedad a todos los demás” (Polcyn 2011).

Cómo salvar a los agricultores familiares y los paisajes rurales

Los programas UVA, ¿han “salvado al agricultor familiar”, como predijeron originalmente algunos de sus defensores? En realidad, no. Durante la década de 1980, la población agrícola de los Estados Unidos descendió drásticamente un 31,2 por ciento. Desde 1991 a 2007, la cantidad de granjas comerciales pequeñas continuó disminuyendo, de 1,08 millones a 802.000. En ese mismo período de tiempo, las granjas muy grandes (con 1 millón de dólares en ingresos brutos por lo menos) aumentaron su participación en la producción agrícola nacional desde casi el 28 por ciento hasta casi el 47 por ciento (Servicio de Investigación Económica del Departamento de Agricultura de los Estados Unidos, sin fecha).

Si el avalúo preferencial de los suelos rurales no ha prevenido la disminución de las actividades agrícolas familiares, ¿ha reducido la tasa de desarrollo del suelo rural en los Estados Unidos? Existen pruebas positivas al respecto, pero son modestas. Un estudio sobre el cambio en el uso del suelo desde que Nueva Jersey adoptó el avalúo por uso del suelo en 1964, hasta 1990, encontró que el programa tuvo un impacto muy modesto en la tasa de conversión de suelos agrícolas a usos urbanos (Parks y Quimio, 1996). Después de su estudio en 1998 de casi 3.000 condados de los Estados Unidos, Morris (1998) concluyó que, en promedio, los programas UVA tuvieron como resultado el mantenimiento de aproximadamente un 10 por ciento más de suelos agrícolas en un condado después de 20 años de funcionamiento del programa. Después de su estudio detallado sobre el cambio de uso del suelo en Luisiana, Polyakov y Zhang (2008) concluyeron que se hubieran desarrollado 65.000 hectáreas más de suelos agrícolas durante los cinco años posteriores a 1992 si no hubiera existido un programa UVA en el estado. Parece, entonces, que los programas UVA han ralentizado algo la expansión metropolitana durante las últimas décadas.

Transfiriendo la carga tributaria a nuestros vecinos

Si bien la reducción en la tasa de desarrollo del suelo constituye un beneficio medioambiental y público de los programas UVA, viene acompañado de un costo social. Cuando las propiedades de agricultores, ganaderos y dueños forestales reciben un avalúo muy por debajo del valor de mercado, los gobiernos locales recaudan menos impuestos, a no ser que suban la tasa de impuestos de todas las demás propiedades gravables. Al elevar las tasas tributarias para mantener los niveles de gasto público, los pueblos y condados aumentan las facturas de los impuestos sobre la propiedad de los propietarios no sujetos al UVA, que principalmente son los dueños de viviendas.

Este impacto potencialmente regresivo de los programas UVA se conocía desde hacía décadas. En su informe de 1976 sobre el avalúo preferencial de suelos agrícolas y espacios abiertos, el Consejo sobre Calidad Medioambiental del Presidente (1976, 6-8) expresó claramente que estos programas estatales tienen un costo tributario de magnitud significativa, afectando la redistribución de ingresos entre los contribuyentes:

Todas las leyes de avalúo diferencial… [generan] ‘gastos tributarios’, porque las facturas de cobro de algunos contribuyentes se reducen…. En lamayoría de los casos, el costo de esta reducción se distribuye entre todos los demás contribuyentes… El efecto de un gasto tributario es precisamente el mismo que si los contribuyentes que reciben el beneficio debieran pagar sus impuestos a la misma tasa que los contribuyentes no preferenciales, y al mismo tiempo recibieran un subsidio… por el valor del beneficio tributario.

La magnitud de esta transferencia de impuestos entre los dueños de propiedades puede ser considerable. El informe de Anderson y Griffing (2000) estima los gastos tributarios de dos condados de Nebraska asociados con el programa UVA del estado. El gasto tributario promedio es aproximadamente el 36 por ciento de los ingresos del condado de Lancaster y el 75 por ciento de los ingresos del condado de Sarpy.

Dunford y Marousek (1981) han estudiado el impacto de la Ley de Impuestos sobre Espacios Abiertos (OSTA, por sus siglas en inglés) del estado de Washington sobre la distribución de la carga tributaria en el condado de Spokane. Ocho años después de la creación del programa OSTA, se han inscrito aproximadamente 180.000 hectáreas del condado de Spokane, es decir, alrededor del 40 por ciento del área total de suelos del condado.

Los autores calculan que el aumento de impuestos de las propiedades no participantes para compensar la reducción de impuestos a los dueños de las parcelas inscritas ascendería al 1,3 por ciento, si se deseara mantener los ingresos constantes. No obstante, oculto en este cálculo promedio para el condado, se encuentran enormes diferencias entre las distintas comunidades. Aun cuando la transferencia tributaria a las propiedades no participantes sería sólo del 1-2 por ciento en muchas localidades, esta alcanzaría hasta el 21,9 por ciento en una comunidad. La conclusión de este y otros estudios es que el otorgamiento de avalúos preferenciales a los terratenientes rurales podría ayudar a retrasar el desarrollo inmobiliario de sus propiedades, pero también podría imponer una carga fiscal sobre los propietarios de viviendas así como también sobre los dueños de propiedades comerciales e industriales.

Reforma de los programas de avalúo por valor de uso

Como muchos estados han tenido casi medio siglo de experiencia con sus programas UVA, este es un buen momento para que los legisladores estatales y los departamentos tributarios hagan una pausa y se pregunten si esta característica de su sistema tributario estatal y local debería ser reformada o no. La transferencia de la carga del impuesto sobre la propiedad causada por los programas UVA en muchas comunidades sólo se puede justificar si dicha tasa tributaria preferencial sirve al más amplio interés público. El argumento a favor de la reforma cobra más impulso si se considera que el 94 por ciento de las unidades familiares agrarias tienen un patrimonio neto mayor a la mediana de todos los hogares de los Estados Unidos.

Después de la brusca caída de los mercados inmobiliarios residenciales y comerciales en 2008–2010, la tasa de conversión de suelos rurales a uso urbano disminuyó en muchos estados, al menos por el momento. Para las comunidades, puede ser más fácil considerar la adopción de reformas a los programas UVA durante este período, cuando muchos dueños de suelos rurales no tienen expectativas de vender sus propiedades a emprendedores inmobiliarios en un futuro cercano. Después de una amplia revisión de la literatura de investigación sobre los programas UVA estatales, recomiendo las siguientes reformas (England, 2011).

Aquellos estados que no imponen todavía una penalización cuando un suelo se retira del programa UVA deben comenzar a hacerlo. A menos que el propietario de suelos rurales tenga que pagar una multa en el momento en que su parcela se desarrolle, solamente se aprovechará del ahorro en el impuesto sobre la propiedad ofrecido por el programa UVA hasta que el precio de mercado del suelo desarrollado sea suficientemente atractivo. Por otro lado, la imposición de una penalización alta por hectárea, que disminuya con la cantidad de años de inscripción en el programa, podría inducir al propietario de suelos rurales a retrasar su desarrollo inmobiliario por años. Durante estos años, los fideicomisos de suelos y agencias estatales tendrían la oportunidad de imponer servidumbres de conservación sobre las parcelas rurales que merecen protección permanente contra el desarrollo inmobiliario. En una era en que pocos propietarios de suelos rurales son agricultores pobres, los programas UVA deberían ayudar a proteger los paisajes rurales y preservar los servicios de ecosistemas, en vez de subsidiar a los terratenientes ricos.

Los estados también deberían reconsiderar tres categorías de suelos rurales que son elegibles para el avalúo por valor de uso. (1) Los suelos agrícolas y ganaderos no deberían inscribirse automáticamente, como es la práctica en algunos estados. En lugar de ello, se debería obligar a los propietarios rurales a documentar los ingresos netos considerables recibidos por la venta de productos agrícolaganaderos durante el año fiscal precedente. Esto evitaría que el propietario de suelos ociosos a punto de ser desarrollados recibiera un descuento en su impuesto sobre la propiedad. (2) Las parcelas agrícolas no deberían ser elegibles para el avalúo por valor de uso si ya se presentaron planes de subdivisión o si las parcelas han sido reasignadas para uso residencial, comercial o industrial. Si existen pruebas consistentes de que un terrateniente va a comenzar pronto a desarrollar una parcela, no hay ninguna razón para continuar dándole el tratamiento tributario preferencial del programa UVA. (3) Los bosques, humedales y otras parcelas de uso no agrícola deberían ser elegibles para el avalúo por valor de uso si generan beneficios públicos tales como protección contra inundaciones, hábitat silvestre y vistas panorámicas. Por otro lado, los suelos áridos con gran potencial de desarrollo que se encuentran en el borde de las áreas metropolitanas se deberían avaluar al valor del mercado si no producen servicios de ecosistemas que beneficien a la sociedad en su conjunto.

Los estados deberían revisar cuidadosamente los métodos de capitalización de ingresos empleados para estimar el valor de uso agrícola de las propiedades rurales. Las pautas para estimar los ingresos netos de suelos agrícolas y para seleccionar la tasa de descuento que capitaliza el flujo de ingresos se debe basar en principios económicos sólidos, y se debería presentar a los contribuyentes de manera transparente. Debido a que los cálculos de capitalización de ingresos son muy sensibles a la elección de la tasa de descuento, dicha elección se debe justificar apropiadamente, y no puede tomarse arbitrariamente. En principio, la tasa de descuento libre de riesgo se tiene que ajustar según la inflación, el riesgo de incumplimiento, el riesgo de vencimiento y las restricciones de liquidez.

Los gobiernos estatales deberían reconocer que, si bien sus programas UVA generan beneficios medioambientales para el público en general, también imponen cargas fiscales sobre las localidades en que los dueños privados de suelos rurales se benefician de un avalúo preferencial. Por ejemplo, California promulgó su Ley de Subvención de Espacios Vacíos en 1972 para mitigar el impacto de la Ley Williamson sobre los presupuestos de los gobiernos locales, proporcionando subsidios estatales para reemplazar en parte los ingresos tributarios perdidos del impuesto a la propiedad. Entre 1972 y 2008, estos subsidios de Sacramento a las ciudades y condados ascendieron a 839 millones de dólares. (Estos subsidios fueron suspendidos en 2009, sin embargo, debido al enorme déficit presupuestario del estado.)

Como el avalúo preferencial del suelo rural se ha convertido en una característica fundamental del impuesto sobre la propiedad en los Estados Unidos, los gobernadores y los legisladores estatales deberían hacer una pausa y reconsiderar si estos tipos de reformas podrían mejorar tanto el desempeño de sus programas UVA como el apoyo popular a los mismos.

Sobre el autor

Richard W. England es profesor de Economía y Recursos Naturales de la Universidad de Nueva Hampshire. También es visiting fellow del Departamento de Valuación y Tributación del Instituto Lincoln.

Referencias

Alig, Ralph J., Andrew J. Plantinga, SoEun Ahn, and Jeffrey D. Kline. 2003. Land use changes involving forestry in the United States: 1952 to 1997, with projections to 2050. Technical Report. Portland, OR: U.S. Forest Service, Pacific Northwest Research Station.

Anderson, John E., and Marlon F. Griffing. 2000. Measuring use-value assessment tax expenditures. Assessment Journal (January/February): 35–47.

Blase, Melvin G., and William J. Staub. 1971. Real property taxes in the rural-urban fringe. Land Economics (May): 168–174.

Council on Environmental Quality. 1976. Untaxing open space: An evaluation of the effectiveness of differential assessment of farms and open space. Washington, DC: U.S. Government Printing Office.

Dunford, Richard W., and Douglas C. Marousek. 1981. Sub-county property tax shifts attributable to use-value assessments on farmland. Land Economics (May): 221–229.

England, Richard W. 2002. Current-use property assessment and land development: A theoretical and empirical review of development penalties. State Tax Notes, 16 December: 795.

———. 2011. Preferential assessment of rural land in the United States: A literature review and reform proposals. Working paper. Cambridge, MA: Lincoln Institute of Land Policy.

England, Richard W., and Robert D. Mohr. 2006. Land development and current use assessment. In Economics and contemporary land use policy: Development and conservation at the rural-urban fringe, ed. S.K. Swallow and R.J. Johnston. Washington, DC: Resources for the Future.

Gloudemans, Robert J. 1974. Use-value farmland assessments: Theory, practice, and impact. Chicago: International Association of Assessing Officials.

Morris, Adele C. 1998. Property tax treatment of farmland: Does tax relief delay land development? In Local government tax and land use policies in the United States, ed. Helen F. Ladd, 144–167. Cheltenham, U.K.: Edward Elgar.

Parks, Peter J., and Wilma Rose H. Quimio. 1996. Preserving agricultural land with farmland assessment: New Jersey as a case study. Agricultural and Resource Economics Review (April): 22–27.

Polcyn, Bryan. Lawmaker calls for hearing after farmland tax loophole exposed. WITI–TV, Twin Lakes, Wisconsin, 22 November 2011.

Polyakov, Maksym, and Daowei Zhang. 2008. Property tax policy and land-use change. Land Economics (August): 396–408.

USDA Economic Research Service. n.d. Washington, DC. U.S. Department of Agriculture. http://www.ers.usda.gov

Una ciudadanía informada es una ciudadanía con poder, pero educar a los contribuyentes y al electorado puede ser una tarea difícil. Aunque a la mayoría de las personas les importan mucho los diferentes problemas de la comunidad, como construir o no una nueva sucursal de la biblioteca o implementar de retiro domiciliario de residuos reciclables, muy pocos de nosotros pasamos nuestro limitado tiempo libre mirando hojas de cálculo para comprender los detalles del presupuesto municipal y las probables implicaciones que puede tener una decisión sobre la obtención de fondos. Esta desconexión es desafortunada, ya que, sepultada bajo esas toneladas de datos, yace la historia de cada una de nuestras comunidades, un mapa que muestra las formas en que una decisión en particular puede tener un impacto sobre la calidad y la disponibilidad de los servicios públicos de los que dependemos en nuestra vida diaria, como el mantenimiento de las calles, la educación pública y los servicios de emergencia.

“Para lograr una posición fiscal sólida, los gobiernos municipales deben dialogar con los residentes”, expresa Lourdes Germán, experta en salud fiscal municipal y miembro del Instituto Lincoln de Políticas de Suelo. “Los residentes deben saber cuáles son las decisiones clave que los funcionarios municipales están tomando, qué significan dichas decisiones desde el punto de vista económico, y de qué manera se están utilizando los impuestos que pagan. Los residentes votan muchas cuestiones diferentes en las asambleas municipales y, con frecuencia, dichas asambleas son la primera oportunidad que tiene la gente de escuchar sobre estas cuestiones, lo cual, a esa altura, resulta demasiado tarde”.

Annie LaCourt, exconcejal del municipio de Arlington, Massachusetts, coincide. LaCourt tuvo la idea de convertir las pilas de hojas de cálculo del presupuesto municipal de Arlington en un sencillo gráfico visual que cualquier miembro de la comunidad pudiera entender, incluso aquellos que carecieran de todo conocimiento previo sobre el proceso presupuestario.

“En el caso de Arlington, realizamos una proyección de cinco años para nuestro presupuesto y debatimos muchísimo con el público acerca de lo que significan dichas proyecciones y de qué manera se relacionan con nuestros impuestos”, explica LaCourt. “Yo quería que ese diálogo fuera más público, más abierto y más transparente para la gente que quiere saber lo que está pasando”.

En particular, LaCourt concibió un sitio web interactivo en el cual los residentes podían introducir su factura de impuestos y recibir un desglose claro y gráfico de la forma en que el municipio gastó los fondos. LaCourt esperaba que, al proporcionarles información más accesible y resumida, los contribuyentes se animarían a participar más activamente en las decisiones importantes (aunque parecieran esotéricas) que forman parte de un presupuesto municipal. LaCourt reclutó a Alan Jones, vicepresidente del comité financiero del municipio de Arlington, y a Involution Studios, un estudio de diseño que donó sus servicios a este proyecto. Y en septiembre de 2013, el Presupuesto Visual de Arlington (arlingtonvisualbudget.org) vio la luz.

“El Presupuesto Visual de Arlington permite a los contribuyentes reflexionar sobre el presupuesto a una escala que les resulta más útil”, señala LaCourt. “En lugar de tratar de entender sumas de millones de dólares gastados en diferentes conceptos del presupuesto, el contribuyente puede ver cuánto le costaron personalmente ciertos servicios públicos en particular. Por ejemplo, en Arlington, gastamos 2 millones de dólares para retirar la nieve el año pasado, lo cual representa el mayor monto que hemos pagado por este concepto. Mediante el uso del sitio web, un residente que tenga una factura de cobro por US$6.000 podrá ver que, personalmente, pagó US$90 por estos servicios, lo cual es una ganga. Cuando uno ve su factura de cobro desglosada en los diferentes servicios, y ve que su participación en el costo total de todos los servicios es relativamente baja, comienza a parecerle bastante razonable”.

Y Jones agrega: “Esto también muestra a la gente que sus impuestos se utilizan para cosas en las cuales no necesariamente piensan, cosas que no ven cuando van en automóvil todos los días por la ciudad, pero que forman una parte importante del presupuesto, tales como el servicio de deuda de los edificios escolares construidos hace 10 años, los pagos de pensión y seguro de jubilados o el seguro de salud de los empleados en activo”.

Otro beneficio del sitio web es que se puede observar fácilmente cómo ha ido evolucionando la política pública con el tiempo. “El Presupuesto Visual de Arlington contiene datos desde el año 2008 y proyecciones hasta el año 2021, por lo que los ciudadanos realmente pueden entender cómo ha cambiado el presupuesto y el impacto que este tiene sobre la comunidad”, señala Adam Langley, analista de investigación senior del Instituto Lincoln de Políticas de Suelo. “Los contribuyentes pueden observar que la ayuda del estado para los gobiernos generales se redujo a la mitad entre 2009 y 2010, y que, desde entonces, nunca se recuperó totalmente. Debido a dicho recorte, la parte del presupuesto de Arlington que se cubría con fondos del estado se redujo, mientras que la parte que se cubre con los impuestos a la propiedad creció del 70 por ciento al 76 por ciento. El impacto de las decisiones gubernamentales sobre los presupuestos de las familias se torna más evidente”.

Brendhan Zubricki, administrador municipal de Essex (una comunidad de aproximadamente 3.500 habitantes que se encuentra a unos 40 km al norte de Boston), comprendió rápidamente de qué manera la herramienta presupuestaria interactiva podía ayudar a los residentes de su comunidad a tomar decisiones financieras importantes en tiempo real. Durante los últimos cien años, el municipio ha estado alquilando a arrendatarios del sector privado una parcela de una propiedad pública costera conocida como Conomo Point. Essex depende de una suma aproximada de US$500.000 todos los años en impuestos a la propiedad sobre el terreno para cubrir el presupuesto de US$6,4 millones financiado por impuestos, sin incluir los US$7,4 millones que paga para participar en dos distritos escolares regionales. En mayo de 2015, los contribuyentes de Essex solicitaron votar para decidir si continuaban o no dando en alquiler esa parcela con un acceso público mejorado a la franja costera principal o convertir la totalidad de la parcela en una propiedad de uso público. Si los residentes votaran a favor de un parque público, el terreno ya no estaría sujeto a impuestos, con lo cual los residentes experimentarían un aumento en sus impuestos para cubrir la suma de US$500.000 que se perdería en concepto de recaudación.

Zubricki recurrió a la herramienta del presupuesto visual con el fin de generar varios modelos impositivos para presentar en una asamblea municipal que se convocó antes de la votación. “El modelo básico era una herramienta de visualización que ayudaba a las personas promedio a comprender el presupuesto. Pero fuimos más allá y lo utilizamos para explicar el futuro financiero de Essex en relación con este concepto principal. Y funcionó. Obtuvimos muchísimas opiniones positivas de los asistentes a la asamblea”, comenta Zubricki. Meses más tarde, en una votación no vinculante, los residentes votaron, con una mayoría abrumadora, por continuar dando en alquiler el terreno de Conomo Point y analizar diferentes formas de mejorar el acceso a los parques costeros existentes y otros espacios públicos (la votación vinculante se realizará en mayo de 2016).

De conformidad con los principios del movimiento de tecnología cívica (es decir, “datos abiertos y código abierto”), LaCourt, Jones y el equipo de Involution Studios puso la herramienta del presupuesto visual a disposición del público de manera gratuita. Esto permitió que diferentes funcionarios municipales pudieran adaptar la herramienta, sin costo alguno, a sus respectivos municipios, simplemente mediante la incorporación de los datos presupuestarios de sus comunidades, todos los cuales se encuentran disponibles al público.

“Gracias a la característica de código abierto del software, Annie y Alan realmente están ayudando a los municipios más pequeños que no pueden permitirse los servicios de un funcionario especializado en tecnología o un desarrollador o un estudio de diseño, y que deben encontrar un equilibrio entre cuestiones que compiten entre sí, tales como financiar un programa escolar o crear un sitio web”, señala Germán. “Estas comunidades pueden utilizar la herramienta simplemente introduciendo sus propios datos”.

Germán añade que este software también ayuda a los funcionarios municipales a planificar mejor el futuro. “El Presupuesto Visual permite a los funcionarios públicos generar modelos para diferentes escenarios durante varios años. El pronóstico y la planificación para varios años es fundamental para la salud y estabilidad fiscal, pero no necesariamente está disponible en las ciudades pequeñas”. El sitio ha recibido muchos galardones, como el Premio a la Innovación 2014 de la Asociación Municipal de Massachusetts.

A principios de este año, LaCourt, Jones y el equipo de Involution Studios creó Visual Government (visgov.com) en respuesta al creciente interés en el software. Visual Government “continúa con el compromiso de poner a disposición de municipios y grupos civiles de todo tipo presentaciones presupuestarias significativas”. Aunque el software sigue estando disponible sin costo alguno, Visual Government también ofrece un paquete de asesoramiento que incluye construir y alojar un sitio web y prestar asistencia a los municipios compilar datos presupuestarios pasados, presentes y futuros. Con la determinación de continuar siendo asequibles, este paquete cuesta US$3.000 y ha sido diseñado principalmente para las comunidades que carecen del personal necesario para desarrollar sus propios sitios web.

“Los sitios web de presupuesto visual no son sitios de gran volumen”, indica Jones, “pero tienen un alto valor. Muestran las consecuencias de las decisiones financieras de tal manera que parecen estar más fundamentadas y ser menos anecdóticas. Las denominamos ‘zonas sin curvas’.”

Loren Berlin es escritora y consultora en comunicaciones en el área del Gran Chicago.

The study of property taxation in Europe offers special challenges because each country has a different definition of land and property, and a different approach to local property taxation. The term property often includes both land and buildings, but may also include plants and machinery as well as certain possessions, such as automobiles. In Denmark, for example, separate taxes may be levied on the land and property elements of a single holding.

Among the 41 counties in our study, we identified 61 different forms of local taxation. Most are based on annual value, usually assessed on a capital or rental basis, and are payable annually. While most countries tax the sale of property at the state level, the Czech Republic, Italy, Portugal, Slovakia and Spain levy such taxes locally. Yet, amid such diversity, a basic central pattern emerges. Each county, except Malta, operates some form of annual property tax on the use or occupation of land and/or property, usually levied at the local level, and the revenues contribute to the provision of local services.

Tax Reform and the European Union

Over the last 10 years France, Denmark, Germany, the Netherlands, Belgium, the United Kingdom and the Republic of Ireland have either completed or are in the process of completing substantial reforms to their taxation systems. Other countries have undertaken more minor reforms. Even some emerging democracies are reviewing and reforming their relatively new taxation systems in light of changes elsewhere. No individual tax exists in isolation, and all are affected by larger fiscal, economic and political developments. The reform of one tax will often have consequential effects on others, and property taxation in all its forms is no exception.

One impetus to tax reform in Europe is the European Union (EU). Fifteen of the countries in our study are members, and many other countries are in various stages of being considered for membership. Many countries are taking this opportunity to reform and improve their tax administration systems and to make their taxation rates competitive with those of other member states. Tax harmonization is not one of the declared aims of the EU, although it may be a natural consequence of many EU polices.

The main incentive for tax reform in Europe is coming from the states themselves. In one of the first signs of the problems caused by traditional national taxation systems, the Ministry of Finance in the Netherlands noted in the early 1990s that not only were businesses locating in the most tax-favorable areas but they also were buying goods and services from other countries where tax rates and other costs were lower. The close proximity of the Netherlands to Germany, France, Belgium and Luxembourg, as well as the good transport links between the countries, exacerbated the situation.

The introduction of the Single European Market has opened internal markets to foreign competition with the removal of trade barriers and the abolition of customs duties between member states. Business competitiveness now depends primarily on efficiency and the amount of taxation imposed by the national government, rather than on state aid and trade policies.

Approaches to Local Taxation

The Taxpayer

The majority of property taxes are payable by the owner. Of the 51 taxes we studied, 29 identified the owner as the taxpayer and 12 are paid by the occupier; the remaining 10 are sales-based taxes. The occupier figure was distorted because the United Kingdom accounted for 50 percent of this figure, due to differences in the implementation of its local taxes. In the Netherlands both parties can be taxed at different amounts. For sales-related taxes the results were less clear, with the taxpayer being the seller in half the cases and the purchaser in the other half.

Sources of Valuation Information

Many countries have some form of computerized cadastral system to record property-related information, and as part of the assessment process different levels of government usually exchange information. The nature and implementation of such systems vary considerably, from a series of different registers administered at various levels of government to a single register administered nationally.

The rights of the taxpayer to centrally held information also differ among countries. Some provide no rights to any information, while others provide notice whenever a new valuation or alteration is made. In some cases, valuation and comparable evidence may be made available at the request of the taxpayer.

Bases of Valuation

Three alternative approaches for the valuation bases are used most frequently. The Capital Value Approach is normally based on the open market value of the property at a specified baseline date, which may be a current date such as the start of the tax year. Sweden designates a date two years before the tax year. This approach has the advantage of giving valuation authorities more time to consider all the evidence available before arriving at their final valuations. The open market value is usually defined on the basis of a property’s best and/or highest value.

The Rental Value Approach is based on the open market rental value at a specified date. England, Wales, Scotland and the Republic of Ireland specify a baseline date some time before the new values come into effect, as in Sweden. The open market rental value may be restricted by assumptions as to changes of use and alterations. The rationale is that the tax is levied on the occupier and the amount of tax is based on the current use of the property, not its potential value.

Properties not normally bought and sold in the market require alternative approaches to valuation. For example, the use of a revenue (or accounts) approach has been adopted in England and Wales for many types of leisure-related property, and its use is expected to increase. The cost approach, related to the cost of construction, also is widely accepted in England and Wales and in other European countries.

The Overall or Unit Approach relates to a property’s size. The tax is levied at a prescribed rate per square meters or per unit, which may vary depending on the predominant use of the property. These rates may be loosely based on rental or capital values, but are more often an arbitrary rate fixed by the appropriate taxation authority. In 1997 the Netherlands moved away from such a system in favor of a market-related capital value approach. Many new democracies have adopted the unit approach due to a lack of property information, a limited and restricted property market, and insufficient resources to enable the development of alternative systems. It is anticipated that many of these countries will move to a value-based system when resources and circumstances permit.

A number of other approaches are used under special circumstances. One is the capital value banding approach adopted for the valuation of residential property for the Council Tax in England, Wales and Scotland. In this approach property is ascribed to various value bands rather than valuing each individual property precisely. Another example is the local business tax, which includes the value of the property plus in the case of France a percentage of salaries and in the case of Spain and Switzerland the business profits.

Revaluation of the Tax Base

One of the key factors in examining European property tax systems is whether the valuations on which the tax is charged are up-to-date. Our research identified a very mixed picture: some countries have not revalued their tax bases for many years and others undertake revaluations regularly, every four or five years (see Table 1). Many countries have either no provision for regular revaluations or have postponed revaluations so often that their tax base bears little resemblance to current market values.

Indexation

Many countries have attempted to overcome the problems associated with infrequent revaluations by some form of indexation. Those countries performing annual revaluations may implement them through actual annual revaluations, indexation of an earlier revaluation or self-assessment declarations by the taxpayer. While annual indexation between regular revaluations every few years may ensure a relatively accurate tax base, its use becomes more questionable when the base has not been updated for 10 or 20 years. The position is made far worse in countries where the property market is changing rapidly, especially in major cities and towns. Any adopted index needs to be closely related to the property market in that location and to the specific property type. In most cases, however, the index is a single figure applied across the entire country and for all types of property.

Exemptions and Reliefs

Exemptions can be considered from two viewpoints: the nature of the property or the nature of the taxpayer. In addition, some countries have introduced arrangements that place a ceiling on the amount of tax payable. Some common features relating to the types of properties for which some form of relief may be granted are:

• land owned by the state and used for the provision of public services, such as schools, hospitals, cemeteries etc., if usually exempt or excluded from the tax legislation;
• land and property used for religious purposes;
• historic land and buildings;
• agricultural land.

Relief to taxpayers takes many forms and can include:

• relief to persons of retirement age;
• relief to disabled persons;
• relief of a percentage of the tax for certain owner-occupiers or remittance of an initial amount of the tax.

Calculating the Amount of Tax

The simplest systems for calculating tax payments adopt a given tax per square meter occupied. Once the area of the property is agreed, it is a relatively simple matter to apply a given tax rate to that area. In some countries, the assessed value must be multiplied by an index or co-efficient and then by a locally determined rate that can vary depending on the size of the authority levying the charge. In France, the situation is even worse for the business tax, where a series of limitations have to be calculated to ascertain whether a ceiling or cap applies to the taxable amount.

Appeal Systems

Most countries have a system by which the taxpayer may challenge the tax assessment or valuation, although that action generally does not postpone the payment of the tax. In some cases the first step is an informal approach to the authority, which may be able to resolve the dispute without the need for more formal action. Where a formal approach is adopted, the appeal may be dealt with as part of the general tax appeal process through the normal tax tribunals and courts, or it may be handled outside the normal tax system, often in courts and tribunals established for the purpose.

Tax Collection and Payment

In many countries taxes are collected by the national tax authority, often as part of the income tax process. This method has the advantage of being linked with national exemptions and benefits; the resulting tax is usually payable over the whole tax year. Under the second common method, the tax is paid directly to the relevant taxing authority, sometimes in installments.

Conclusion

European countries are constantly reviewing their tax systems and adopting the best features of other systems. This presents special challenges to a survey such as ours, but also enhances its potential impact by allowing comparative analysis to influence new legislation. One very important conclusion at this early stage of the research project is the importance of keeping the tax base up-to-date. This not only simplifies the entire valuation and collection process but also ensures a tax base that is more acceptable and understandable to taxpayers. During this year we propose to widen our research and complete data collection on other European countries. In addition, we will attempt to compare the amounts of revenue raised by each type of taxation and analyze them within the context of each country’s local government and finance system.

Peter K. Brown is professor of property taxation at Liverpool John Moores University, a frequent author and a regular speaker on valuation, rating and taxation matters. Moira Hepworth is head of research at the Institute of Revenues, Rating and Valuation (IRRV), based in London. The authors are joint recipients of a David C. Lincoln Fellowship in Land Value Taxation. This article is based on their first year of research and their recent working paper.

Related Publication

Peter K. Brown and Moira Hepworth. 2000. “A Study of European Land Tax Systems.” Lincoln Institute Working Paper. 156 pages.

Claudia De Cesare is a property tax adviser to the Secretariat of Finance for the municipality of Porto Alegre, Brazil, and she teaches courses on valuation and property taxation in the postgraduate program of the Federal University of Rio Grande do Sul in Porto Alegre. She has been a course developer and instructor in the Lincoln Institute’s Latin America Program for more than five years. She is also a member of the advisory board of the International Property Tax Institute (IPTI) and is the former technical director of the Brazilian Appraisal Institute (IBAPE).

Land Lines: Porto Alegre is known internationally for its innovative and democratic local administration. What is unique about this city compared to others in Brazil or Latin America?

Claudia De Cesare: Indeed, Porto Alegre has initiated many pioneering actions in public administration, including the use of the property tax as an instrument for value capture; the sale of building rights (solo criado); the use of building rights in place of cash to pay for expropriations of real property; and the collection of rents in exchange for the use of public space by infrastructure networks, such as telecommunications, cable TV and gas. For instance, five years before the approval of the national City Statute legislation regulating the use of progressive rates for the property tax, Porto Alegre passed local legislation to address this matter. Although the Supreme Court later ruled against this local action and in favor of the need for national legislation, the city has played a leading role in promoting debate on many polemic issues, including private rights, property rights and the public interest.

I think the reasons for Porto Alegre’s innovations include a clear definition of the policies and goals to be achieved, as well as “guts” by local leaders to tackle issues even when conflict is likely to occur. Public officials have maintained an overriding vision that the city must be planned democratically for the community at large and a conviction that public assets must be taken seriously. Not all initiatives have succeeded, but citizens now have a better understanding of the local government’s responsibilities and its limitations. The fact that one political party, in this case the labor party (PT), was elected to lead the city government for more than 15 consecutive years also contributed to the continuity and coherence of these public actions. This kind of political legacy is quite unusual in Brazil and Latin America in general.

LL: How has this proactive atmosphere affected the administration of the property tax?

CD: We can identify two periods in terms of property tax performance in Porto Alegre. Before 1989, local revenue from the property tax followed the typical pattern in Latin America. It was mainly symbolic, characterized by a low level of effort in administration, negligence in local tax collection, and extreme dependence on revenue transfers from the national and state levels. Following major property tax reforms that revised exemption policies, introduced progressive rates and established a new assessment list, the property tax collection rate grew more than 300 percent over the first two years. A major public education campaign emphasized the arguments for regular property tax payments, the importance of the tax for the provision of public services, and the reasons why the local authorities would not tolerate tax evasion.

A change in attitude by the city administration also led to more effective enforcement of property tax payments and legal actions to address tax evasion or disputes over assessed values. It was made clear there would be no amnesty for property tax debts. The participatory budget process also contributed to the rehabilitation of the property tax in Porto Alegre, as overall confidence in public administration increased (see Goldsmith and Vanier 2001). Since the early 1990s, the annual revenue collected from the property tax has been stable, representing nearly 0.95 percent of local GDP. At the national level, by comparison, the property tax represents only about 0.5 percent of GDP. Subsequent improvements in the property tax have not taken place, basically because the legislature has rejected several proposals for either reforms or major revisions.

LL: How important is the property tax in Latin America?

CD: Although the simple answer to this question is “it depends on the country,” the property tax is not a significant revenue source in any Latin American country, even though most countries have long established property tax systems. Only in Argentina and Uruguay does the revenue collected from the property tax represent more than 1 percent of GDP. In Brazil the average performance is close to 0.5 percent, and in Mexico and Costa Rica it is around 0.3 percent of the GPD. Moreover, in relative terms, there is great variability in the importance of the property tax within countries and cities that is not directly explained by the local GDP or population size. Part of the performance depends on political will, which varies enormously among cities.

LL: In your opinion, what are the main controversies related to property tax collection?

CD: I would say that the controversies include the real goals to be achieved with the property tax; the degree of universality in its implementation; the changes needed to take into account social, economic and cultural concerns; and the distribution of the tax burden for regulating the tax according to ability to pay. Concerning ability to pay, principally in Brazil, there is much discussion about application of progressive rates that vary according to assessed values. The underlying issue might be how simple the system should be.

Other issues have to do with the lack of consensus about the transparency of the system, local autonomy versus a national system for tax collection, and general political and economic instability that affects property value maps and other data. Furthermore, the public disclosure of information on the property tax, such as individual property characteristics, assessed values and annual tax payments, is not always considered secure.

LL: What would it take to improve property tax collection?

CD: In my experience, the successful performance of the property tax depends on a combination of adequate fiscal policies, a consistent legal framework for tax collection and an efficient administrative structure. For instance, the application of confiscatory (high) rates to vacant sites to promote land development is likely to stimulate tax evasion instead. In addition, political will and the capacity for negotiation with stakeholders are essential for the introduction of reforms or revisions in tax administration. Making the connection between public services and revenue collected from the property tax more evident to taxpayers is likely to contribute to a better collection rate. In other words, the role of the property tax would be enhanced if the community is accustomed to paying the property tax and understands its effect on improving public services. Finally, a trend toward a participatory fiscal culture, in which the community takes part in the decisions about public revenue collection and expenditures, could increase the acceptability of the tax, making its collection easier.

LL: What is changing in the region to influence the prospects for tax reform?

CD: I believe tax administrators understand and care more today about the property tax. They are aware of the pressing need to increase revenues through better performance of the tax, in spite of challenges due to its high visibility and historically poor performance record. They also recognize the need to break this paradigm, in relation to both taxpayer expectations and the role of the property tax as a component of the national taxation system. Several isolated yet promising experiences have made it clear that property tax reform in Latin America is viable, but it requires political will, innovation and a commitment to overcome perceived barriers to its implementation.

LL: What are the main differences in the property tax environment of Latin America compared to North America?

CD: The U.S. and Canadian systems are certainly more mature and transparent than most Latin American systems, largely because information is available in the public domain and technology is easily accessible. Some of the important differences observed in Latin America are illegal occupation patterns, the lack of reliable information on land tenure, the large number of informal property transactions and the prevalence of progressive housing construction. All of these characteristics of Latin American land use present distinct challenges to developing procedures to assess property values and administer a fair and consistent tax policy. Concerning the use of technology in the administration of the property tax, last year I learned about a cadastral system in Mexico that is as effective as the best systems used in the U.S. However, this is unusual; there is great variation in the use of technology among different local authorities in Latin America.

LL: Based on your research, what are some of the positive and negative impacts of switching to a land value-based tax system for residential properties?

CD: The conclusion of my study was quite unexpected, since the hypothesis supported the opposite argument. Using a database from Porto Alegre, I found that the main result from using land value as the tax base was the tendency toward more regressivity in the distribution of the tax burden, with low-priced houses clearly identified as the potential losers. The fact that part of the tax burden would be transferred from high-priced to low-priced properties is a real cause of concern. However, further investigation is necessary to address imperfections in the valuation model used to estimate land values and to examine other databases. In any event, the lack of knowledge about the use of land value as the tax base and its perceived advantages was identified as a major obstacle for its application in Brazil.

LL: How do you use various assessment tools and techniques to determine land value?

CD: One of the main arguments against the use of land value as the tax base is the great difficulty in estimating the value of improved sites. In my study, the use of hedonic models (MRA) for estimating land values was found to be viable. To compensate for the lack of data on undeveloped sites in highly developed areas (central areas and business districts), I used a reasonable number of houses that were sold for new development. Their market value was determined entirely by the potential of the site for future development, as well as by the neighborhood characteristics. Therefore, the findings support the hypothesis that eventual difficulties in land assessment do not prevent the use of land value as the property tax base, at least, in the case of Porto Alegre. Nevertheless, a lower degree of assessment uniformity was observed in the valuation of undeveloped sites, since site prices tend to suffer strong random variations and are highly influenced by the particular characteristics of the buyer and seller involved in each transaction.

LL: What do you think are the greatest challenges facing Latin America in the next five years?

CD: As discussed before, a major challenge is to pursue more effective property tax systems. I think the promotion and implementation of national programs for the improvement of the property tax is essential to reinforce the property tax at the local level. On a more personal note, my goal is to develop a web-based system for collecting and disseminating information on property taxes in Latin America, allowing comparative analyses among municipalities according to predefined criteria. The system would have property tax administrators fill out data on the performance of the property tax on a regular basis, allowing for evaluation over time. This would greatly advance the project, now being supported by the Lincoln Institute, which uses conventional questionnaires to survey property tax information in the region.

Reference

Goldsmith, William W. and Carlos B. Vainer. 2001. Participatory budgeting and power politics in Porto Alegre. Land Lines 13 (1): 7–9.

Past trends will not foretell the future, but charting how state and local finances weathered the 2001 recession suggests viable ways to navigate going forward. Lacking the deficit finance ability of the federal government, states and localities must set a spending course based on anticipated taxes and revenues. An unexpected crisis-like the stock bubble burst at the beginning of this century and the subsequent economic slowdown-that throws budgets into fiscal chaos requires such unpopular bailouts as tax increases or cuts in services and welfare. Did that happen?

Participants at a Lincoln Institute-sponsored conference in March 2007 gathered at the Urban Institute in Washington DC, to discuss the recession and share findings on how states and localities determined various actions and policies to address its impacts. This conference, titled “State and Local Finances after the Storm: Is Smooth Sailing Ahead?”, was also hosted by the Urban Institute-Brookings Institution Tax Policy Center, and by the Kellogg School of Management and the Institute for Policy Research, both at Northwestern University.