STATE-TAX CREDITS AND LAND-USE - POLICY ANALYSIS OF CIRCUIT-BREAKER EFFECTS

This study investigates two issues related to property tax relief and the preservation of prime agricultural land; (a) the extent to which s tate circuit-breaker tax credits are capitalized into land values and (b) the circuit-breakers' effects in preventing the transition of land from farming to developed uses. Using cross-section data for the year s 1980-1983 for the circuit breaker programs in Michigan, models of la nd values and participation rates are estimated. The results provide e vidence that the property tax credits are partially capitalized into p roperty value and that the circuit-breakers do not effectively retard the flow of land into urban use.