The Property Tax, Land Use and Land Use Regulation

The Property Tax, Land Use and Land Use Regulation

Studies in Fiscal Federalism and State–local Finance series

Edited by Dick Netzer

Dick Netzer, a leading public finance economist specializing in state and local issues and urban government, brings together in this comprehensive volume essays by top scholars connecting the property tax with land use. They explore the idea that the property tax is used as a partial substitute for land use regulation and other policies designed to affect how land is utilized. Like many economists, the contributors see some type of property taxation as the more efficient means of helping to shape land use. Some of the essays analyze a conventional property tax, while others consider radically different systems of property taxation.

Chapter 4: The influence of local fiscal structure and growth control choices on 'big-box' urban sprawl in the American West

Robert W. Wassmer

Subjects: economics and finance, public finance


4. The influence of local fiscal structure and growth control choices on ‘big-box’ urban sprawl in the American West Robert W. Wassmer 1 INTRODUCTION Though forbidden to raise property taxes, [California] city governments do get sales taxes from stores. Result: what’s called ‘fiscalization of land use’, meaning a wild scramble for retail base especially for mega auto malls and big-box retailers. The result’s not just more suburban sprawl, but real ugliness, what California urban planning expert William Fulton describes as ‘sales tax canyons bleak relentless [zones] designed not to encourage or facilitate community, but simply to empty passing wallets’. (Peirce, 1998) This quotation, by a newspaper columnist represents what some observers in California and other states believe is a cause and effect relationship that generates profound social consequences. Municipalities that rely on local sales taxes for the provision of local services seek taxable retail sales not only for the consumption needs of their citizens, but also for the discretionary fiscal surplus it yields. Such local governments seek out new retail stores and draw retail sales away from central places in a metropolitan area where economics would have naturally caused such retail sales to occur were it not for local sales tax reliance. In policy discussions this issue has received increased attention due to the claim that this ‘fiscalization of land use’ contributes to urban sprawl. Salient to the motivation of this chapter is that all of this has occurred with little to no empirical evidence regarding the importance...

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