Why is property tax expected to remain a primary source of revenue for local governments?

Property tax is expected to remain a primary source of revenue for local governments largely because there are no adequate substitutes for fiscal autonomy. This means that property tax provides local governments with a certain level of control over their revenue streams, enabling them to fund essential services such as education, public safety, and infrastructure maintenance. Unlike other forms of taxation that may depend on external factors, property tax is based on a stable and predictable asset—real estate—which offers reliability in revenue generation.

Local governments often face constraints from state and federal regulations regarding other forms of taxation, which restricts their ability to raise funds as freely as they can through property taxes. Therefore, property tax remains a crucial element of local government financing, allowing them to maintain financial independence and respond to community needs effectively.

In comparison, while some might argue that property tax is easier to collect, or that local governments prefer it, these factors do not fundamentally underscore the necessity of property tax for fiscal autonomy. Moreover, the notion that property tax generates higher revenue than sales tax does not inherently validate its primary role; the stability and predictability of revenue from property taxes are what truly solidify their importance.