ABSTRACT
The role of the property tax in local government finance has diminished drastically over the past sixty years. Just before the Great Depression of the 1930s, the property tax provided about two-thirds of all the revenue of American local governments, compared to about one-fourth today (see Table 3.1). However, that decline has not been continuous. The change in the role of the property tax occurred in two stages, the forties and the seventies, two episodes distinctly different from the long periods of stability in the relative role of the property tax that occurred before and after each of these two periods. Since roughly 1980, we have been in one of those periods of stability, possibly even in a period in which there may be a small reversal of the long decline. This is surprising because, simultaneously, the legal base of the property tax has continued to narrow, limitations on property tax rates and levies have spread, and abatements and exemptions for economic development purposes have spread even more. Thus, the absence of a decline in the property tax implies an increase in the burdens on that part of the nation’s tangible wealth not excluded from the base or protected from the full rigors of the tax. But because every aspect of the property tax is highly varied geographically, the national statistics hide considerable variation among and within regions, that is, from state to state. The Property Tax and Local Government Revenue, Selected Years 1902–89 https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">
Property tax revenue as percent of —
Personal income
Total local government revenue
All own-source revenue
Total tax revenue
1902
NA
68.3
72.7
88.6
1927
NA
68.8
76.1
97.3
1932
8.4
67.2
77.3
97.3
1940
5.4
54.0
72.0
92.7
1946
2.7
49.5
63.9
91.9
1950
3.1
43.7
60.3
88.2
1955
3.3
42.7
58.0
86.9
1960
3.9
42.3
58.0
87.4
1965
4.0
40.8
57.0
86.9
1966
4.0
40.2
57.6
87.4
1967
3.9
39.0
56.7
86.6
1968
3.8
38.2
56.1
86.1
1969
3.9
37.5
55.8
85.4
1970
4.0
37.0
55.3
84.9
1971
4.1
36.4
55.2
84.6
1972
4.3
36.2
55.3
83.7
1973
4.0
34.0
54.0
82.9
1974
3.9
32.4
52.4
82.2
1975
3.8
31.3
51.1
81.6
1976
3.8
30.8
50.5
81.2
1977
3.8
30.7
50.4
80.5
1978
3.5
29.9
49.1
79.7
1979
3.1
26.6
44.7
77.5
1980
2.9
25.4
42.1
75.9
1981
2.9
25.0
40.8
76.0
1982
3.0
25.0
39.7
76.1
1983
3.0
25.4
39.3
76.0
1984
3.0
25.3
38.7
75.0
1985
3.0
24.8
37.7
74.2
1986
3.1
24.7
37.3
74.0
1987
3.1
24.7
37.0
73.6
1988
3.1
25.7
38.3
74.1
1989
3.1
25.8
38.4
74.3
Source: U.S. Census Bureau, Government Finance diskettes, 1989.