ntially reduce or eliminate the reliance on the property tax. This proposal is now being considered by the Governor and the state legislature.
This research examines the concept of funding for public education with a focus on the use of the property tax for this purpose. The advantages and disadvantages of the use of the property tax to fund public education are reviewed within the contexts of both fairness to the rate payer and equity in funding for public education.
Property Taxes and Fairness to Rate Payers
Land in particular and other forms of tangible personal property have served as bases for taxation as far back as recorded instances of taxation have been found. The early day property tax, the tithe, originally was based on the productive value of land. From the its very beginnings, however, the property tax concept has aroused criticism. Thus, the original concept of the property tax as a tax on productive value, or ability to pay, shifted over time to a levy on the market value of property without consideration for its productive value.
In the United States, property taxes date to the early Colonial period when real property was taxed on the basis of its productive value.ver time, the concept of property taxation also shifted in the United States towards market value taxation and away from productive value taxation. By 1902, reliance on the property tax for governmental revenues had reached its peak in the United States 51.4 percent of total tax revenues. By the early 1990s, the contribution of property taxes to government revenues had declined to approximately 10 percent. The property tax remains, however, as one of the three top revenue generating tools for government in the United States; the other two being income taxes and consumption taxes. As income taxes are levied primarily by the federal government (states tax incomes at much lower levels than does the federal government), and as consumption t...