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Title:The effects of changes in property tax rates and school spending on residential and business property value growth PDF Logo
Authors:Kang, Sung
Reese, Laura
Skidmore, Mark
Issue Date:2012
Series/Report no.:CESifo Working Paper: Public Finance 3899
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.
Subjects:local public finance
property tax
property value growth
JEL:R10
R50
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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