Skip to comments.Falling home values mean budget crunches for cities
Posted on 12/26/2011 6:49:41 PM PST by DeaconBenjamin
The bust that began in 2007 has just begun to ravage tax revenues in communities from coast to coast. The problem is unlikely to subside soon.
For instance, Baltimore collected $815 million in property taxes during the most recent fiscal year. Next year, the figure is predicted to shrink to $803.5 million. The following year, $773 million. The year after that, $735.7 million. The year after that, $729.4 million.
I dont see any quick fixes over the next four or five years, to be honest. Baltimore already faces a budget deficit of more than $50 million next year. Obviously, it means we have much lower revenues than we had in past. Its creating gaps in our budget.
Communities generally see a lag before property taxes reflect the true value of a home. Thats good news for homeowners during boom times, when their tax bills dont immediately reflect skyrocketing values. Its not so great during the bust of recent years, when many homeowners protest that their taxes havent fallen as rapidly as their property values. But in many places, the assessments have fallen.
Many local governments weathered the early years of the financial crisis in part because the property tax revenues they rely upon so heavily held steady or actually increased as a result of assessments that reflected inflated prices. Municipalities must now recognize the collapse in home prices and the shrinking tax base that comes with it. At the same time, state and federal aid dries up.
Local governments have lost more than half a million employees since the financial crisis hit in September 2008. Through November, local governments had shed an average of 9,300 jobs each month this year, offsetting some of the job growth generated by the private sector.
(Excerpt) Read more at washingtonpost.com ...
Let the bastard politicians starve.
In that case, better raise taxes. /s
Drop in home values have nothing to do with budget shortfalls. How stupid is this reporter
That’s exactly what they do.
When the assessment goes down the tax rate goes up.
They will adjust it until they get what they need.
Austerity: the immovable object.
Entitlement mentality: the irresistible force.
Epic clash coming in 5 ... 4 ... 3 ...
Many Pennsylvania Counties (assessments are done by County government) have voted to delay countywide reassessment indefinitely.
There is nothing to gain by spending money to determine that the real estate tax base has contracted.
Exactly, like I said this journalist is ignorant or stupid.
vacant foreclosed homes return no taxes, and there are record #’s in foreclosure today
Falling property values means nothing to the taxing authorities where I live. They just keep jacking the rates up to offset the value base it’s calculated on. They don’t give a rip.
Millages and property tax index off of real estate values, and abandoned homes are a drag on municipal revenues. Lower real estate values cause less income.
An abandoned home still has water lines and power lines running across the property in easements, and those line still have to be maintained even when there is no tax paying occupant.
We are ten years over built and this will not ease any time soon.
Did you never bother to read the housing bubble threads in years gone by? Where this was going to go was accurately explained, and now we are there.
Move someplace where they are hamstrung in their power to raise rates.
I dont see any quick fixes over the next four or five years, to be honest......Reduce spending. Took me all of 5 seconds to realize that. They can figure how to reduce spending; they just DON”T want to.
My County Assessor has doubled tax rates each of the past 3 years and is on record stating he will continue to do such until the County is solvent.
Not sure you are right. The foreclosured home still exists, and the property tax bill exists. Maybe the bank pays it, I don’t know, but I would bet somebody does.
Buy your own county.
Instead of investing their new found wealth in a rainy day fund, they spent money on inflated Pensions and Salaries to the Public Employees who are primarily funded from Property Tax Revenue, Fire, Police and Teachers.
Then the dam burst and they realized they forgot to buy Life-jackets.
My city is following your advice. In 2004 it instituted a city income tax. This year it doubled the income subject to it (while claiming they weren't "raising our taxes").
All the while the local liberal rag ran piece after piece demanding those of us still hanging onto our jobs "pay our fair share". Every time I hear some dimwit say that I want to make a non verbal response resulting in painful outcome for the speaker.
Our city and county just raised property tax rates to offset declining home values.
I’m pretty sure the rates won’t go down when property values rise.