No, according to experts who participated in a conference last May on what the subprime mortgage crisis did to state and local revenues. The conference was sponsored by the Lincoln Land Institute and Urban-Brookings Tax Policy Center. The mortgage crisis may have sparked the downturn, but overleveraged financial institutions fueled it.
Experts separated the crisis’ effects on the downturn from other economic factors and found they had little effect on state and local revenues. Real estate transfer, income, and sales tax revenue generated by real estate sales and construction accounted for 2% of the revenue loss nationwide, about $15 million. Property taxes remained high, even increased in some states, the experts reported.
(“What the Housing Crisis Means for State and Local Governments,” State Tax Notes, November 29, 2010 is available in the Legislative Library)
