Skip to comments.Property Taxes Questioned As Prices Zoom
Posted on 05/22/2005 10:18:16 AM PDT by NormsRevenge
Soaring property taxes are a top worry in state legislatures across the country, where lawmakers are trying to appease disgruntled homeowners and, in some cases, courts that are demanding change in the system so schools are more equitably funded.
Some states are weighing plans to lower taxes. Others just want to keep them from rising too fast. Still others are aiming to substantially change the tax system and find another way to help pay for schools that closes the quality gap between wealthy and poor communities.
"People are facing being taxed out of their homes," said Ted Harris, a 69-year-old retiree living on the Nevada side of Lake Tahoe, whose taxes climbed from $2,200 in 1990 to $12,000 last year. "Government simply swallows the money and finds lots of reasons to spend that money."
From Texas to Illinois to Pennsylvania, lawmakers are weighing property tax caps, limits, exemptions and other ways to ease the burdens for homeowners whose tax bills are the down slide of home values increasing.
Proposals to change the system have become part of the gubernatorial campaigns in New Jersey and Virginia, the only states with governor's races this year.
In most states, cities, counties and municipalities rely upon property taxes to pay for much of local government and schools.
Nationally, K-12 education covers 42.8 percent of its spending with local funds, with most of the rest coming from the state and less than 10 percent, on average, from the federal government, according to 2002 federal statistics. Part of the property tax pressure stems from a trend in recent years for cash-strapped state governments to limit their help to local governments.
"Property tax relief is the mantra of the day," said Bert Waisanen, an analyst at the National Conference of State Legislatures who tracks tax policy. "States are acting to provide as much additional relief as they can afford to."
In response to widespread complaints, Nevada the fastest growing state in the country signed into law last month a cap on property taxes, limiting growth to 3 percent a year on all single-family, owner-occupied primary residences, with a higher cap of 8 percent for commercial property and second homes.
That didn't satisfy everyone. State Assemblywoman Sharron Angle, with supporters like Harris, want a constitutional amendment similar to California's Proposition 13, the 1978 initiative that limited property tax growth to 2 percent a year.
Legislatures are debating bills in many states, but so far:
_ Texas legislators agreed to lower property taxes for schools, with the state picking up a bigger share of the education load. The House and the Senate are trying to settle on the size of the tax cut and how the state will raise the money to cover the cut, but time is running out.
_ New Jersey legislators are moving forward with plans to ask voters to approve a constitutional convention that would take on changes in the property tax system, heeding arguments that taxes have gotten out of control.
_ Illinois lawmakers are debating a plan to swap higher income taxes for lower property taxes, a response to years of demands that the state change the way it pays for education.
_ Pennsylvania last year legalized slot-machine gambling with some of the money to cut local school property taxes, but many cities and towns are still considering whether to sign on.
"People are saying 'Wait a minute, we need a rest,'" said Pete Sepp with the National Taxpayers Union, an Alexandria, Va.-based group that seeks limited government and low taxes.
Just from 2002 to 2004, the nation's median average price of a single-family, metropolitan home rose from $158,100 to $184,100, according to the National Association of Realtors. That's a 10 percent increase. Some areas such as Las Vegas, Ft. Lauderdale, Fla., and Riverside, Calif. saw 30 percent increases.
That also means higher taxes, which homeowners don't like.
Meanwhile, lawsuits and court decisions around the country are forcing leaders to try to improve education in poorer school districts. The role of property taxes is a top issue.
"People hate property taxes," said John Augenblick, an education expert who works with states on funding issues. "What you're fighting is the majority who don't have kids in the school, who want to lower taxes because they don't have children in school."
Augenblick said the pressure from taxpayers and the courts is combining to put more and more responsibility on states, not local communities, to pay for education. But the resources aren't necessarily available at the state level, either.
"The question," he said, "is what gets shut down?"
On the Web:
Education Commission of the States: http://www.ecs.org
In retrospect, with the cost of housing through the roof, how lucky we are that we citizens had the foresight to vote for it.
"...what gets shut down?"
An excellent start would be the Dept. of Ed. I would like to see a printout of allocated funds now, since the Ed. federal budget has become so gigantic. I guarantee little of it is getting down to the schools. With every increase in budget, a new layer of administrators is added at the top and a huge pay increase.
Schools could function so much better on so much less if PC and the NEA and federal govt. werre taken out. What is (almost)totally lacking in schools is attention to actual learning and skills--reading, math and analytical skills.
Yet the dumb, d@#m clueless dim Dems scream for more money, more money.
Here in the Doyle-Lautenschlagger Demcrat socialist state of WI we are being taxed out of our homes and our state...
And thank God for that. When you live in an area where home values go up 20-25% a year, you need a way to keep your property taxes from rising so much that you can't afford to live in your own home any longer.
The public school system eats about 75% of our local public budget. Although the budget has gone from $90 million a few years ago to $140 million now, the school district is having to lay off 60 teachers or other employees this year. We probably have something of a real estate bubble, but mostly in commercial land, and that might be affected by the transfer of 2800 personnel and 2000 jobs from one of the military bases over the next 5 years.
Yep- since we moved in 1987, our taxes have quintupled... so our "forever home" has become our "how soon can we get outta here?" home.
And yes, the local government has grown like a tumor, spreading everywhere- but it's "for the sake of our children," so thus far the sheep ( AKA taxpayers ) are all too happy to be shorn.
I am still stunned that Kali is the most conservative state for prop tax increases. Add that to no bugs and great weather and it makes it hard to leave. the bad news is that I have to put my prop tax savings into private school for the kids (worth every darn penney).
That's because if it isn't your ox being gored, you don't care. And there are so many people who pay little or nothing in income tax and no property tax that they overwhelm taxpayers in sheer numbers. People who don't have a stake in anything force the rest of us to pay. A system set up and perpetuated by the Democrats.
I was complaining the other day to one of our County Coimmissioners that taxes would soon run people from their homes. He told me of a plan the county has that prevents that. he stated that in this county if a person cannot afford to pay their taxes they are deferred until after their deaths, meaning they can stay in their home until death and then the county steals the home from the heirs. Now isnt that a great plan?
This is what drove the tax revolt and Prop 13 in California. It stopped the assessment rise by freezing the tax rate. They avoided the problem in TX by lowering rates so that property owners paid the same in tax before and a fter the assessment change
After reading that I feel lucky to be in California and for having purchased my place back in the early 1980s.
What we also need is a cap on the maximum budget allowed for these local governemnts.
There is no way government "services" have increased at the rate of property values. Of couse some democrat will make garbage men wear taxpayer funded tuxedos "for the children".
"Friends living in the apartment house said, I am not voting for it because it will not benefit me, because I rent. I simply said to them, "I intend to own my own home. I am voting for it"."
Wrong answer, you should have said that if you don't vote for it any increase in property taxes charged on your apartment will be added to your rent bill including a profit added.
Thank god we passed Prop13, now all we have to do is defend it every year!
In Michigan, we have the Headlee Amendment. It restricts property taxes to a small percentage or the rate of inflation, whichever is LESS.
There is, however, a HUGE loophole.
When you go to sell your home, the house is reassessed and the cap is removed. If you purchased your home in 1990 for $150,000 and its now worth $250,000, the SEV is bumped up to the higher level. Its a nasty shock to homebuyers and it builds up a lot of resentment when it comes to what your neighbors pay versus your bill.
Communities, cash strapped for school funds, are really pushing NEW housing developments because they aren't subject to the Headlee cap. My parents house, build two years ago, was found by the State assessor's office to have been overassessed (and overtaxed) by $40,000. New builds are cash cows in Michigan.
Democrats can't get all the blame anymore. People need to wake up to the big government Republicans. They have the House, the Senate and the White House. What they don't have anymore is an excuse.
You just knew something like this was going to happen when they started asessing homes at 'market value' and the reasessments started coming every 3 years (my county re-asesses 1/3rd of all homes each year).
Prop 13 had the same loophole. It has led to homes in the same subdivision on the same street with the same design paying vastly different tax bills. But it is fair in the respect that the buyer bought with full knowledge of the tax he would pay.
Actually it's a 16.4% increase, but expecting either accuracy or honesty from the AP will usually leave you disappointed.
Wow I thought I had it bad in Long Island!
That answer just got no where with these people. Believe me I used it also.
Actually the assessed value can raise only 2% per year. Local referendums and bond measures can raise the tax bill more than 2% per year.
When the bubble bursts and prices drop, how fast will they lower taxes?
It's time people realized that owners/builders of rentals don't give a damn whether anyone has a place to live iet's pure numbers and income/profit.
I was a contractor in commercial, never did housing, for over 40 years and I couldn't care less whether a business had a building to do business out of or an office to park their ass in. Build it for a profit or don't build it!
Only government low cost slum housing cares the least about anyone having a place to live.
My annual property tax has increased from $2,500 to $5,500 in 12 years I have been here. Appraisals are done once every 3 years, with any increases phased in over the subsequent 3 years, and my most recent appraisal (2004) says I will be phased up to $7,200 a year for 2006.
I sure as hell didn't see a 188% increase in income over that time.
Look up in the sky. See any pigs flying overhead?
More like a screaming dive.
>>All the the local school board needs is a majority vote to raise taxes.
our school board just increased our taxes 5,6%. third year in a row. reason: pensions and healthcare.
Sorry if i missed but what state are you in?
If you really want to game the system, live in an area with good school districts, like most of OC (except for Santa Ana). That way, there's even more appreciation since people can write off the mortgage interest and have the gov't pay for their good/decent schools.
Could it be that the neighbor house is worth less because it's next to yours? :-)
Unfortunately, being on the coast makes the area attractive to every refugee from a big city, which they ruined via too much government. They get here, settle down, and then complain that they don't have all the niceties & services they got accustomed to "back home." So we have seen our once small and benign city & county governments metastasize into tax-gobbling monsters.
Hiding behind the new, multi-million dollar "governement safety complex" at the former NAS Glynco. It's so "safe" you can't get in to see what your tax money purchased, but not to worry- if a hurricane flattens the area, our fearless leaders will be snug and safe.
If you asked them, they'd say yes.
Sorry to hear that. I'm in California, property taxes is one of the reasons i'm afraid to even buy a house out here.
I'm afraid if i buy a house that the government will raise taxes through the roof. Too much money is being spent on garbage we don't need, i agree.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
That is absolutely nuts...and it cannot stand!!
They aren't strapped...they are awash in money. And they will never have enough....for there will always be a need for more!
Actually, I think only those people who will be directly forced to pay a given tax should have the right to vote on it. Otherwise, its taxation w/out fair representation.
Cincy isnt bad, but like I said, Columbus is a pretty good town all in all...
And they'll probably want interest on the amount "overdue" at the time of death.
can someone explain to me WHY your property taxes HAVE to go up just because your house value goes up???
I don't get it.