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 state 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 years 1980-1983 for the circuit breaker programs in Michigan, models of land values and participation rates are estimated. The results provide evidence that the property tax credits are partially capitalized into property value and that the circuit-breakers do not effectively retard the flow of land into urban use.