AEFP 45th Annual Conference Program
Please note: All times are Central Time (CT)
Chair:, University of Virginia
Chair:, Georgia State University
Chair:, Reason Foundation
Chair:, Edunomics Lab at Georgetown University
Chair:, New York University
Chair:, University of Michigan
Chair:, AIR & U. of WA
Chair:, University of Washington
Chair:, Federal Reserve Bank of New York
Chair:, Lincoln Institute of Land Policy
The property tax plays a key role in the funding of public education in the U.S. In 2015-16, about 45 percent of the total revenue supporting elementary and secondary education came from local governments, and 81 percent of the local share came from property taxes. A central tenant of education finance in the U.S. is local control. A robust role for local funding is important if local citizens, through their school board or local referenda, are going to have a meaningful voice in the operation of local schools. The consensus among public finance scholars is that the property tax has many positive at-tributes as a local government tax. The immobility of property means that it is a more efficient source of local tax revenue than local sales, earnings, or income taxes. While there is still no consensus concerning the incidence of the property tax, many scholars argue that the property tax is more progressive than most sales and excise taxes. Property taxes are levied on both residential and non-residential property, but local income taxes are generally restricted only to residents. While within-state variations in property tax bases can lead to school funding inequities, there is no evidence that local government sales and income tax bases are more equal.
Despite its positive attributes, citizen complaints about property taxation have led most state legisla-tures to enact a variety of property tax limitations—on the property tax base, on rates, or on reve-nues. During the past few years, legislative proposals in several states have called for the complete or partial elimination of the school property tax. Other states have enacted new limitations on school property tax revenues.
Here lies the dilemma. In light of these ongoing attacks on the property tax, how do we (local school boards, state governments, and the federal government) assure that there is adequate funding for public education while maintaining a significant degree of fiscal autonomy for local school districts?
To investigate this dilemma and to explore possible solutions, this Policy Talk session will include speakers from three states that have enacted various types of property tax limitations. They will each describe the ways in which their state restricted property taxation and the efforts taken to ensure continued funding for public education. They will then assess the effectiveness of those efforts and suggest possible policy reforms to ensure adequate funding for public education on an ongoing basis.