An interesting report from the Lincoln Institute of Land Policy was published recently. Entitled The Property Tax-School Funding Dilemma, the study includes a comprehensive review of recent research on both the property tax and school funding, and summarizes case studies of seven states—California, Massachusetts, Michigan, New Hampshire, New Jersey, Ohio, and Texas, the majority of them heavily reliant on property tax revenues to fund schools. Among these states Massachusetts ranks the highest and California the lowest, according to the respective property tax relief and school funding principles presented in the report.
The bottom line from the study warns that lawmakers shouldn’t wildly cut taxes across the board, if you want to have good schools. Here are some more tidbits about the study from the abtract:
Property taxation and school funding are closely linked in the United States, with nearly half of all property tax revenue used for public elementary and secondary education. There is an active policy debate across the country regarding the degree to which public schools should be funded with property tax dollars. Some policy makers and analysts call for reduced reliance on property taxation and increased reliance on state funding; others claim that the property tax is a critical ingredient in effective local government. School funding is no less controversial, and nearly every state has dealt with school funding litigation and court mandates at least once over the last several decades.
States experiencing taxpayer revolts among homeowners are tempted to reduce reliance on the property tax to fund schools. But a more targeted approach can provide property tax relief and also improve state funding for public education, according to this new report by Daphne A. Kenyon, a visiting fellow at the Lincoln Institute. “Those who have tried to reduce property taxes and improve school performance at the same time have not met with much success,” according to Kenyon.
One objective of the report is to provide information helpful to state policy makers and others who are grappling with the twin challenges of court mandates regarding school funding and constituent pressure to lower property taxes. Another objective is to correct some common misconceptions through a critical analysis of nine myths regarding school funding litigation, property tax characteristics, and the state role in funding education.
While there is no one-size-fits-all solution, the report recommends addressing property taxes and school funding separately.
The Lincoln Institute of Land Policy conducts research and policy evaluations, holds conferences, provides education and training, supports demonstration projects, and publishes books and reports on policy issues relating to land. The Institute seeks to improve the quality of public debate and decisions in the use, regulation, and taxation of land by integrating theory and practice, and providing a nonpartisan forum for the discussion of related issues.
