As many states continue debating the issue of cutting of property taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es while raising other taxes, a friendly reminder to policymakers and voters on the public finance of property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es: there is no such thing as a free lunch. How to provide property tax relief can basically be summed up in one simple equation:
Local Property Tax Burden = Level of Local Government Services X Cost Per Unit of Local Government Services X Local Share of Financing Local Government Services X Share of Local Revenue that comes from property taxes
In other words, in order to reduce property tax burdens, you have one of four options.
First, you can cut the level of services provided by government. Second, you can improve government efficiency at the local level (possibly by eliminating rents acquired by public sector workers). Third, you can increase state level financing of local government services, thereby raising taxes at the state level, typically on sales or income. Or finally, local governments can switch to a different tax source besides property taxes.
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