Policy Documents

Do Property Tax Caps Work? Lessons for New Jersey from Massachusetts

Josh Barro –
May 3, 2010

In 1980, Massachusetts capped local property tax growth at 2.5 percent each year. This report from the Manhattan Institute’s Josh Barro examines the effects of that law on Massachusetts and its implications for a similar policy in New Jersey. He concludes the law succeeded in limiting tax increases and per-pupil education spending in Massachusetts. These fiscal successes have not come at the expense of the state’s educational outcomes, which are the nation’s best. Its educational advantage persists even within disadvantaged groups. This suggests that New Jersey and other states could significantly limit burdensome tax increases without hurting educational outcomes by enacting similar property tax caps.