[danaris]

I mean, this also suggests that part of the way out of this is to change that perverse incentive structure.

Fund municipalities more from the state level, through progressive income taxes (and/or potentially other funding sources). Property taxes don't have to go away, but if they're no longer the sole or primary source of funding for the municipality where they're being levied, that removes a very obvious source of problems.

Just as obviously, it will introduce other problems, but in my experience, when you come to recognize that a particular structure in finance/government/rules/etc is causing problems, it is easier to get in a mindset of identifying similar problems in the structures you set up to replace them. This does require a certain minimum degree of competency and a certain maximum degree of willingness to upset everyone else's applecart for one's own benefit among the powers that would be making the decisions, of course, which cannot always be a given.