Local Response to Fiscal Incentives in Heterogeneous Communities

Journal of Urban Economics, Vol. 68, No. 2, pp. 138-147, 2010

35 Pages Posted: 27 Oct 2011

See all articles by Jonah E. Rockoff

Jonah E. Rockoff

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: 2010

Abstract

I examine the impact of a property tax relief program in New York State that lowered the marginal cost of school expenditure to homeowners. I find that a typical school district, which received 20% of its revenue through the program in the school year 2001–2002, raised expenditure by 4.1% and local property taxes by 6.8% in response to the program. I then examine how the preferences of various groups of local taxpayers affect educational spending by identifying systematic variation across districts in the response to fiscal incentives. These results support the hypothesis that homeowners are more influential on local expenditure decisions than renters, owners of second homes, or owners of non-residential property.

Suggested Citation

Rockoff, Jonah E., Local Response to Fiscal Incentives in Heterogeneous Communities (2010). Journal of Urban Economics, Vol. 68, No. 2, pp. 138-147, 2010, Available at SSRN: https://ssrn.com/abstract=1949336

Jonah E. Rockoff (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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