Moving Beyond the Influence of Neighbors on Policy Diffusion: Local Influences on Decisions to Conduct Property Tax Reassessment in New York

Abstract

Over the past few decades, research on policy adoption and diffusion has grown rapidly. Despite the relatively large number of publications, however, little attention has been paid to the important question of why a policy is differently implemented or diffused across governments. To answer this question and improve our understanding of local policy choice beyond widely cited neighboring influences, we closely examine the roles of three main policy actors-internal actors, external actors, and go-betweens-in the local policy diffusion process, drawing particularly upon property tax reassessment scenarios. In addition, we focus on nested institutional arrangements, including form of government and type of property tax assessor, that affect the policy decisions of internal actors. Using data on cities and towns in New York State for 1993-2010, we estimate event history models of property tax reassessment activities. Our findings reveal that regional interactions with neighbors that have already adopted the policy and top-down go-betweens through positive inducements can help facilitate property tax reassessment across municipalities. Reformed municipal governments in the council-manager form, along with appointed assessors, are also most likely to adopt reassessment policy frequently, compared with other institutional arrangements. Overall, this study advances the policy diffusion literature by exploring the roles of different influences through a more detailed, broader approach.

Institutional Differences and Local Government Performance: Evidence from Property Tax Assessment Quality

“…2 Interestingly, several agencies within local governments are responsible for different aspects of managing the property-tax system, such as assessing, levying, and collecting property taxes (Fisher, 2007). Specifically, the typical procedure involves local assessors assessing local property value, governing bodies like school boards and county legislators in each local government deciding the property tax rates and limits (Eom et al, 2017;Melnik & Cenedella, 2009), and treasurers collecting the property tax owed. Of the wide range of functions in local property tax administration, we focus here on property (re)assessment activity.…”

“…For local governments, it is important to attempt to foster a situation in which similar properties are fairly and accurately assessed at similar values at a uniform percentage of market value. Governments should also prevent arbitrary tax incidences or discrimination due to socioeconomic class (Eom, 2006;Eom et al, 2017;Heavey, 1983;Plummer, 2014). However, there is a general understanding that the true market value of a property is not necessarily reflected by its assessed value and subsequent tax rate each year.…”

“…Examples of these differences include form of government, elections, budget referendums, voter initiatives, and veto power of an elected official. In addition, a huge related literature has grown, examining the influence of differences across local governments in various contexts: the sizes of local budgets (Chapman & Gorina, 2012;MacDonald, 2008;Steunenberg, 1992), school-district spending decisions (Ebdon, 2000;Kim & Eom, 2016;Nguyen-Hoang, 2012;Santerre, 1989), student academic performance (Hoover, 2008), cities' property tax dependence (McCabe & Feiock, 2005), cities' debt-management policies (Whalley, 2010), the cycle of property tax reassessment activities (Eom, Bae, & Kim, 2017), tools for strategic economic development (Feiock, Steinacker, & Park, 2009;Kwon, Berry, & Feiock, 2009), and contracting out (Hefetz & Warner, 2004;Levin & Tadelis, 2010;Shrestha & Feiock, 2011).…”

“…More important, in cases of unfair personal tax burden, homeowners tend to put more political pressure on local authorities to reduce their burden. These taxpayers can exert pressure through property-tax-governed voting or tax appeals (Bowman, 2006;Eom et al, 2017;Lowery, 1984;Ross, 2011). Some local agencies and officials may fear such situations, as they may cause a loss of public support and declining levels of trust in government.…”

“…In our in-depth examination of the assessment dynamics of property values and their outcomes, we follow the logic of North's (1990) institutional change, as well as McCabe and Feiock's (2005) nested levels of institutions, which explore constitutional-level and substantive-level rules of governance influencing a state and its municipalities. Essentially, our position is that political institutions are likely to offer different incentives to local public actors, leading to different public decisions, based on their selection and retention method (Eom et al, 2017;Frant, 1996;McCabe & Feiock, 2005;Ross, 2011). For our empirical analysis, in terms of two-tiered institutional arrangements embedded in local governments, we present a dichotomous characterization of the widely cited local councilmanager form of government versus the mayor-council form of government.…”