Does land conservation raise property taxes? Evidence from New England cities and towns

Alexey V. Kalinin, Katharine Sims, Spencer R. Meyer and Jonathan R. Thompson

Journal of Environmental Economics and Management, 2023, vol. 119, issue C

Abstract: Protected lands provide high ecological and social value, yet a perception that land protection erodes local property tax bases and shifts tax burdens to other owners creates barriers for new protection. We investigate the impact of land protection on local property tax rates using panel data from more than 1400 towns and cities in New England between 1990 and 2015, including both ownership and easement-based protection. We find that on average, new protection results in a small increase in annual tax rates, with an expected change of $0.0231 per $1000 of value for a 1 percentage point increase in the percent of municipal area protected. This corresponds to an increase in a homeowner's annual property tax bill of $1.16 per $100,000 of value for 100 acres of new land protection. We do not find that taxes continue to increase over time or reduce municipal expenditures. However, for towns that are growing slowly, have lower household incomes, or use municipal land protection, we estimate greater tax bill increases of up to $10 for each $100,000 of value. These results provide evidence that land protection does not have a substantial impact on property taxes, but also highlight the importance of maintaining and expanding public compensation mechanisms, such as payments in lieu of taxes, where expected burdens from new protection may be greater.

Keywords: Land conservation; Property taxes; Local economies; New england; Protected areas; Public finance. JEL; (Q24; Q28; R51) (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:119:y:2023:i:c:s0095069622001358

DOI: 10.1016/j.jeem.2022.102782

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