Catherine Collins, associate director and senior research associate of the George Washington Institute of Public Policy, discusses property tax issues including tax base erosion and green property tax incentives.

1. What’s Up With Property Taxes
Critical Issues for the Fiscal Health of
New England Cities and Towns
Lincoln Institute of Land Policy
Catherine Collins December 1, 2016

3. Property Tax Revenues Held Up
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Growth of Local Property Tax Collections in US and New England
2005-2013
Growth in US Growth in New England

4. Tax Base Still Below Peak
1,450
1,500
1,550
1,600
1,650
1,700
1,750
1,800
1,850
1,900
1,950
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
BillionDollars
New England Total Assessed Value
Assessed Value

5. While Still Important There are Limits
• Both New York and New Jersey added new
property tax limits since the recession
• Pennsylvania added levy limit in addition to
earlier rate cap
• Since the recession, more localities are facing
ceiling limits in Massachusetts
• Flat rates of growth or inflation based pose
different problems

6. Low Inflation-Good News Bad News
• Tax limits adjusted to changes in CPI can be
difficult to manage
– New York’s new levy growth ranged from 2% in the
first year 2013 to just 0.68% for 2017
– Florida’s baseline growth for assessments ratchet
down
• For relief programs, some programs suspended
any CPI growth as budget-saving measures
• Growth of homestead exemptions adjusted for
inflation slowed

7. Ways States Have Stressed Localities
• Expanding exemptions for veterans,first
responders, and surviving spouses—generally
at local option but at local cost
• Making adjustments to those incentives that
are paid for by the state, reducing the relief
and saving state revenues
• Changing the earmarking of revenues

8. The Shrinking Base
• Eliminating Taxable Personal Property
– New England’s use of Personal Property
– States that are eliminating the tax
• Expanding economic development programs
• Assessing Big Box Stores as Dark Stores

9. Non-Profit Tax Exemption
• Treatment of non-profit organizations for
chartable purposes
– Mandatory, by application, by legislation
• Voluntary Payments in Lieu of Taxes
• Settlement of taxpayer challenges to
exemption
• Tightening the definition of non-profit

10. Coping with Extreme Weather

11. Policies Help or Hinder
• Aftermath of Sandy to rebuild and reassess
• Addressing potential losses from rising sea
level
• Protecting vulnerable areas
– Loss of preferential treatment if violating water
quality requirements
– Treatment of “conservation” lands and easements

12. Other Environmental Taxes
• San Francisco Bay area– approved a parcel tax
to protect wetlands
• Maryland “rain tax” repealed as state
mandate but continues to be imposed at local
level using various policies
• Banning single use plastic bags
• Missouri continued sales tax dedicated to soil
and water conservation and state parks

13. The Many Colors of “Green”

14. Wide Use of Green Property Tax
Incentives

15. Utility and Residential Solar Use
Increase
15

16. Renewables Raise Property Tax Issues
• What happens when the facility—solar or
wind, is located on farm land that enjoys
current use status?
• How are solar panels taxed when owned or
leased by property owner?
• Does selling “excess” energy back to grid
affect the taxation of the renewable facility?
• Does selling back to grid make user a utility?

17. Forgiven But Can’t Be Forgotten

18. What’s This GASB Rule 77 All About
• New reporting requirements
– Different from Tax Expenditure Budgets
• New York City first to report
• What does it mean
• How much does it represent

19. Thanks
And Thanks to Jack Warner