Suppose that a city-wide property reassessment has just been conducted. The last comprehensive reassessment occurred thirty years ago. The effect of the recent reassessment was to raise the city-wide assessment ratio from 0.3 to 0.9.
a. Explain the impact of such an increase in the assessment ratio on the effective rate of taxation.
b. Won’t the tax rates simply be adjusted by the local government units to generate the same revenue?
c. What equity issues arise in this situation? Explain.
d. What difference does it make that school aid is distributed to districts partly on the basis of property wealth per pupil? Explain.