Working Paper, Federal Reserve Bank of Atlanta 2009-19a
We examine voter support in 2008 for Constitutional Amendment 1 in Florida, which modifies a Proposition 13–like property assessment growth cap by allowing homeowners to port their exempted value to a new home. Despite claims by amendment proponents that it would lower property taxes, we do not find that support was higher in precincts with a greater share of eligible property owners. Nor was support explained by the average size of existing exemptions. Instead, we find that precincts with more mobile households supported Amendment 1. In addition, we find evidence that voters understood how changing assessment methodology could affect their tax share. Under a conventional assessment cap, a homeowner who moves resets the assessed value to the market price, lowering the share of assessed value for remaining homeowners. Remarkably, we find that support for Amendment 1 falls as mobility in other parts of the city increases. This finding suggests that Amendment 1 was viewed as a way for high-mobility voters to shift the tax burden back to low-mobility homeowners. In addition, support is higher when a city has a high number of out-of-state immigrants, who have no tax exemption to port into the city, but support is lower when the city has high rates of in-state immigration. These findings suggest that voters are fairly tax savvy and as concerned with shifting the tax burden as they are with curbing absolute expenditures.
property tax voting assessment cap lock-in mobility local public finance political economy