Restraining the Leviathan: Property Tax Limitation in Massachusetts / David M. Cutler, Douglas W. Elmendorf, Richard J. Zeckhauser.

Format:

Book

Author/Creator:

Cutler, David M.

Contributor:

National Bureau of Economic Research.

Elmendorf, Douglas W.

Zeckhauser, Richard J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6196.

NBER working paper series no. w6196

Language:

English

Subjects (All):

Real property tax--Law and legislation.

Real property tax.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Restraining the Leviathan

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Cambridge, Mass. : National Bureau of Economic Research, 1997.

Summary:

Proposition 2.5, a ballot initiative approved by Massachusetts voters in 1980 sharply reduced local property taxes and restricted their future growth. We examine the effects of Proposition 2.5 on municipal finances and assess voter satisfaction with these effects. We find that Proposition 2.5 had a smaller impact on local revenues and spending than expected; amendments to the law and a strong economy combined to boost both property tax revenue and state aid above forecasted amounts. Proposition 2.5 did reduce local revenues substantially during the recession of the early 1990s. There were two reasons for voter discontent with the pre-Proposition 2.5 financing system: agency losses from inability to monitor government were perceived to be high, and individuals viewed government as inefficient because their own tax burden was high. Through override votes, voters approved substantial amounts of taxes above the limits imposed by the Proposition.

Notes:

Print version record

September 1997.

Includes bibliographical references.