Officials need to minimize taxes that obstruct job creation, affordable housing, and wholesome urban growth, say authors Rick Rybeck and Walter Rybeck, who wrote the August PM cover story "Break the Boom and Bust Cycle: How to Counter Declining Property Taxes." They suggest taxes that positively support these essential purposes or at least do not hinder them. Property tax reform meets this criterion and should be a high priority.
Localities are in a revenue bind. The federal government, stymied by dwindling resources and gridlock, cannot come to the rescue. Local and state governments must find their own solutions. By shifting taxes off of buildings, jurisdictions can encourage residents and businesses to fix up homes, stores, and factories. If properly structured, this “universal abatement” can be offered without any loss of revenues.
The resulting economic stimulation will help restore the local economy and boost the tax base. Localities that pioneered this reform reveal that it works. It offers local governments a way to overcome the hurdles imposed on them by the real estate market collapse and to reduce the severity of future boom-and-bust cycles.