The Effects of Changes in Property Tax Rates and School Spending on Residential and Business Property Value Growth

Sung Hoon Kang, Laura Reese and Mark Skidmore

No 3899, CESifo Working Paper Series from CESifo

Abstract: In this paper, we examine the effects of changes in property tax rates and school spending on residential and business property value growth in southeast Michigan. We use panel data for 152 communities in the five counties surrounding Detroit between the years 1983 and 2002, a period during which state government mandated major changes to school finance. Using the mandated changes to identify causality, we find that: 1) residential property values are more responsive to school spending changes than property tax rate changes; 2) business property values are more responsive to tax rate changes than school spending changes, and 3) business property values are more sensitive to changes in tax rates as compared to residential property. We also examine tax competition effects on property value growth, showing that tax competition plays an important role in property value growth in the southeast Michigan region.

Keywords: local public finance; property tax; property value growth (search for similar items in EconPapers)
JEL-codes: R10 R50 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Effects of Changes in Property Tax Rates and School Spending on Residential and Business Property Value Growth (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3899

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