IDEAS home Printed from https://ideas.repec.org/p/tow/wpaper/2010-16.html
   My bibliography  Save this paper

Political Costs and Fiscal Benefits: The Political Economy of Residential Property Value Assessment

Author

Listed:
  • Michael D. Makowsky

    () (Department of Economics, Towson University)

  • Shane Sanders

    () (Department of Economics, Nicholls State University)

Abstract

In many American states and municipalities, property taxes are the primary means of raising government revenues. Unlike sales or income taxes, however, property taxes have a significant element of subjectivity - the assessed value of the property being taxed. Given this subjectivity, there exists the possibility of political and fiscal incentives entering into property value assessment. We examine the determinants of assessed property value growth in a panel of 351 Massachusetts municipalities from 1995 to 2009. We hypothesize that the year to year growth of assessed value is in part determined by the municipality�s fiscal condition, the availability of alternative revenue sources, and whether the municipality�s property assessor is directly elected or appointed by an elected official. We find evidence that elected assessors respond to both the fiscal benefits and political costs of increasing their assessment of property values. Appraisals grow faster in towns with appointed assessors and respond to temporary raises in the cap on tax revenues with increases in appraisal growth.

Suggested Citation

  • Michael D. Makowsky & Shane Sanders, 2010. "Political Costs and Fiscal Benefits: The Political Economy of Residential Property Value Assessment," Working Papers 2010-16, Towson University, Department of Economics, revised Aug 2010.
  • Handle: RePEc:tow:wpaper:2010-16
    as

    Download full text from publisher

    File URL: http://webapps.towson.edu/cbe/economics/workingpapers/2010-16.pdf
    File Function: First version, 2010
    Download Restriction: no

    More about this item

    Keywords

    Property Taxes; Local Public Finance; Property Appraisal.;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tow:wpaper:2010-16. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Juergen Jung). General contact details of provider: http://edirc.repec.org/data/detowus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.