The Role of Tax Limitation in New York State's Property Tax Burden

Abstract

Direct voter involvement (or even the potential for direct involvement) in policymaking through initiatives, referenda, and other mechanisms has forever altered the governance landscape in many municipalities. Nowhere is this more evident than the causes and consequences of tax and expenditure limitations (TELs). This paper explores the recent history and potential implications of a particular kind of TEL — property tax rate limitations — for municipalities in New York. The authors use an innovative simulation approach to show that rate limitations might be a fiscally sound and politically effective option for lawmakers who seek to provide tax relief while not causing substantial fiscal harm to municipalities.

Keywords: property tax, expenditure, limitation, tax burden