Government Consolidation in Property Tax Administration

Abstract

Government consolidations remain highly controversial, and the proposition that consolidated governments operate more efficiently than smaller government units is a contested claim. This research evaluates the outcomes of Indiana property tax consolidation reform of 2008. It documents 19.0–27.0 percent cost savings from consolidated tax administration and estimates cost elasticities. The study finds that assessment costs are highly elastic to assessor workloads, wage levels, and the percentage of agricultural land, but not the assessment quality. Although these findings may assist other fragmented local government units in evaluating vertical consolidation proposals, they may not directly generalize to other areas of government.