Do Property-Tax Caps Work? Lessons for New Jersey from Massachusetts

Proposition 2.5 appears to have held down property taxes as well as overall taxation in Massachusetts, despite above-normal increases in state aid to localities since the enactment of the property-tax cap. As a result, per-pupil education spending is significantly lower in Massachusetts than in New Jersey. However, Massachusetts’s students consistently outperform New Jersey’s on the NAEP exams. Massachusetts’s advantage persists within most demographic groups. All kinds of school districts in Massachusetts have a lower cost model, even those with high percentages of students who are learning English or who come from low-income families, and these students still outperform their New Jersey counterparts on the NAEP.

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