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Short-Term Effects of a 1990s-Era Property Tax Limit: Panel Evidence on Oregon's Measure 5

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  • Figlio, David N.

Abstract

Since the early 1990s, a number of states have imposed limitations on local public school revenues and expenditures. I consider the effects of this trend, which has been likened to the "local property tax revolt" of the 1970s, on the provision of local public education. I use a comprehensive panel of school districts from Oregon and Washington, with annual data from before and after Oregon imposed its limitation in 1990. Controlling for unobserved heterogeneity, I find that Oregon student-teacher ratios have increased significantly as a result of the state's tax limitation. However, I find that the ratio of administrative to educational spending has remained unchanged, or may have even increased, in the wake of the tax limit, suggesting that the incidence of the tax limitation has been borne by instruction at least as much as by administration. I also investigate the distributional effects of this limitation.

Suggested Citation

  • Figlio, David N., 1998. "Short-Term Effects of a 1990s-Era Property Tax Limit: Panel Evidence on Oregon's Measure 5," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 55-70, March.
    • Handle: RePEc:ntj:journl:v:51:y:1998:i:1:p:55-70
    DOI: 10.1086/NTJ41789311
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    References listed on IDEAS

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    1. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
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    4. Harold W. Elder, 1992. "Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws," Public Finance Review, , vol. 20(1), pages 47-63, January.
    5. Downes, Thomas A., 1992. "Evaluating the Impact of School Finance Reform on the Provision of Public Education: The California Case," National Tax Journal, National Tax Association, vol. 45(4), pages 405-19, December.
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    Cited by:

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    2. Lars P. Feld & Gebhard Kirchgässner, 2005. "Sustainable Fiscal Policy in a Federal System: Switzerland as an Example," Palgrave Macmillan Books, in: Hanspeter Kriesi & Peter Farago & Martin Kohli & Milad Zarin-Nejadan (ed.), Contemporary Switzerland, chapter 12, pages 281-296, Palgrave Macmillan.
    3. Jeffrey Zabel, 2014. "Unintended Consequences: The Impact of Proposition 2½ Overrides on School Segregation in Massachusetts," Education Finance and Policy, MIT Press, vol. 9(4), pages 481-514, October.
    4. Bradbury, Katharine L. & Mayer, Christopher J. & Case, Karl E., 2001. "Property tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition," Journal of Public Economics, Elsevier, vol. 80(2), pages 287-311, May.
    5. Justina A.V. Fischer, 2005. "Do Institutions of Direct Democracy Tame the Leviathan? Swiss Evidence on the Structure of Expenditure for Public Education," CESifo Working Paper Series 1628, CESifo.
    6. Jeffrey M. Kulik & Natalia Ermasova, 2018. "Tax Expenditure Limitations (TELs) and State Expenditure Structure in the USA," Public Organization Review, Springer, vol. 18(1), pages 53-69, March.
    7. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    8. Lavertu, Stéphane & Clair, Travis St., 2018. "Beyond spending levels: Revenue uncertainty and the performance of local governments," Journal of Urban Economics, Elsevier, vol. 106(C), pages 59-80.
    9. Sean Corcoran & Thomas Romer & Howard Rosenthal, 2017. "The twilight of the setter? Public school budgets in a time of institutional change," Economics and Politics, Wiley Blackwell, vol. 29(1), pages 1-21, March.

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