Revenue elasticity measures how much a revenue source changes in response to economic conditions. Highly elastic revenues like income taxes grow quickly during economic booms but fall during recessions. Property taxes are relatively inelastic—they remain stable regardless of economic conditions because property values and tax rates change slowly. For municipalities relying heavily on property taxes, revenue stability is a benefit during downturns but a challenge during growth, as revenue doesn't automatically increase with economic expansion. Understanding elasticity helps municipalities plan for revenue fluctuations. Low elasticity explains why municipalities must continually raise property tax rates to fund growing service costs.