Research

Tax Reform as a Tool for Combating Climate Change in California

Photo courtesy Bay Area Monitor

Report: Integrating California’s Climate Change and Fiscal Goals: The Known, the Unknown, and the Possible

Karen Chapple, Professor of City and Regional Planning

Partners

UC Center Sacramento and the Bacon Public Lectureship and White Paper Award

Project Description

A global leader in climate planning and sustainability, California has made great strides to reduce the harmful effects of global warming and greenhouse gas emissions. Yet, California’s suburban sprawl has increased dependency on cars, making the state’s transportation sector the largest single contributor to greenhouse gas emissions. A white paper by Karen Chapple Ph.D, Professor of City and Regional Planning, used a combination of literature review and original data analysis to examine the relationship between fiscal structure and land development patterns to propose tax reform legislation that would support climate change goals.

While previous studies established how tax systems affect state growth, social equity, fiscal stability and how property and sales taxes shape development patterns, this research analyzes city tax revenue data linked to parcel and neighborhood-level data on development and travel characteristics and argues that tax reform could be a tool for improving climate incentives.

Additionally, the paper proposes increasing the amount of property tax revenue returned to municipalities based on their performance in building transit-oriented development and infill. It also suggests that California could match its cap-and-trade revenues to a given municipality’s share of property tax revenue so the funds are released steadily over a period of time as opposed to a project-by-project basis.

The full report is available here.