WILL HOMEOWNERS IMPOSE PROPERTY TAXES

This paper analyzes whether homeowners will use property taxes, as opp osed to other revenue instruments, to finance local public services. T he paper assumes homeowners recognize the impact of the outcomes of th eir voting for public services on their property values. Homeowners ar e modelled as endogenous in number in each community; and within each community they correspond to the ex post voter-residents of a communit y. Under these conditions, in a Nash equilibrium among imperfectly com petitive communities, homeowners do not choose to finance with propert y taxes. The paper also integrates the two divergent models of communi ty decision-making-the utility-maximizing voter model and the profit-m aximizing corporation model.