The project examines how foreign-born populations shape municipal finance using a panel American cities observed over 2012 - 2019. The analysis suggests that the effects of immigration on total spending and spending on social programs are heterogeneous and depend on the way immigration is measured. While the effects of the stock of immigrants are not pronounced, annual increases in immigration tend to have negative associations with total spending and spending on social programs. Increases in human capital counteract these negative effects. These findings contribute to the research at the nexus of urban immigration policy and finance in contemporary America and by identifying the general effects and socioeconomic conditions under which the effects of immigration on municipal spending diverge.

Until the 2019 reform, Texas cities operated under a lax property tax regime that triggered a public referendum on tax increases if revenue collections increased by more than 8 percent relative to the previous year. In 2019, SB@ reduced this threshold to 3.5% increases. Using state comptroller data for all Texas cities over 2016 – 2024, we examine how the state’s 2019 property tax reform (SB2) influenced municipal property tax levy growth and property tax rates. We document that SB2 reduced levy growth in real terms and reduced tax rates for most cities as they chose to stay below the limit to avoid the public referendum on tax revenue increases. Importantly, combined with the personal exemption increase, the effects of SB2 on revenue collections and rates were particularly strong for poorer cities, handicapping local government financial conditions.