Land Value Tax Implementation Research / Studies
Pace University: June 8, 2013
How CSE did it:
Research, background context, historical evidence and theoretical underpinnings are worked to bring success to our victory in Connecticut. These are just a few of the tools created to achieve our goal:
Bringing Transparency & Efficiency to Connecticut’s Property Tax System [Apr 2013]
CSE/Urbantools first researched and assisted Altoona, PA in its transition to land value tax in 2001. This year, in 2011, Altoona became the first city in the USA to impose no property tax ion buildings. Currently, school and county taxes are not primarily land-based. This report looks at some outcomes in the past 10 years, along with the revenue effects of the last year of transition to a land only tax, as well as the impact of reversion to the standard property tax.
Presented in a brief, AXI's impact is nearly purely progressive in tax incidence, essential for a community that lacks a wide spectrum of levels of wealth.
A similar outcome for Lancaster, PA is noted. The AXI alternative is used,
due to questions about the accuracy of existing property valuations
A New Approach to Land Value Tax: Assessment Exemption for Improvements (AXI)
What is AXI?
Put simply, a blanket permanent abatement of a certain dollar amount on a building is put into effect. The overall tax rate then rises accordingly, with a greater impact on land value. For example, if someone’s building is worth $50,000 and the AXI is $50,000 then they will pay no tax on the building. If the building is worth $500,000 then the owner would pay tax on $450,000.
This has the effect of sometimes dramatically reducing tax burden on lower valued properties, most often residential properties, but also “mom and pop” and mixed-use parcels. In a tax jurisdiction, it would provide immediate and substantial tax relief to homeowners, from poor to upper middle class, while maintaining or enhancing revenue flows.
By that measure, it is a model with much vertical equity* .AXI shifts the tax burden to those properties with either the ability to pay, or the capacity to build and profit from what is now fallow land.How is AXI Determined?
First a number is chosen that fits the data set For a model, the goal would the median value of all taxable buildings in the city (for example, in the city of New London, CT that is $83,100).
As a model, we chose $50,000 to simplify the educational process. First each property must be credited with the AXI, then the formula can be used
a. (BAi-$50,000, MAX $0) = New BAi
b. New BAi + Lai = New total assessment
c. Sum all properties for a Grand Total (LA 495,951,895+New BA $750,295,360)= 1,246,247,255
d. PTRp = $39,684,251/$1,246,247,255 (Revenue divided by Assessments = Rate)
e. PTRp = 31.843 mills
The county seat of Montgomery County, PA asked for a revenue impact study for this borough of 35,000.
Philadelphia, Pennsylvania - 2013
CSE/Urbantools' Recent Submissions and Studies to the City of Philadelphia and its elected leaders, citizens and policy groups.
What is wrong with how the current tax system works in a major city? In what ways can it be fixed? CSE submitted a position paper using analysis of current assessments to demonstrate that land value taxation and an assessment exemption on improvements can be a force for fairness, vertical equity and economic growth in an environment that has historically discouraged these positive factors.
The city of Frederick requested a report on the revenue impact of land value taxation for the FY12 budget season. The report and appendices on patterns of land ownership and outcomes are presented here.
Asked by the city to determine if LVT was a candidate for implementation, CSE had to recommend against a traditional LVT shift due to wildly varying land and building assessments, over-assessment of poor neighborhoods relationally to richer suburban townships, and problematic land values for newer "big box" commercial development. Outcome: LVT is not a good choice for the city at this time. The valuation data needs more study, preferably through mapping. The county's assessments must be challenged on ground of uniformity, equity and accuracy.
Titusville, Crawford County,Pennsylvania January 2007