The 2017 tax reform capped federal deductions for state and local taxes (SALT), raising the cost of public services for high-income residents in high-tax areas. This paper examines how local governments responded, using average pre-reform SALT deductions as a measure of exposure. Highly exposed jurisdictions increased property tax revenues without cutting expenditures or shifting toward non-deductible sources. These patterns suggest that affluent residents valued public goods enough to accept higher local tax prices. The findings challenge the view that federal deductibility is essential to local fiscal capacity and highlight the resilience of subnational finance under changing intergovernmental incentives.