Homeowners can expect bigger property tax bite

[Yo_Mama_Been_Loggin]

No doubt the results of such unfunded mandates like Homeland Security and No Child Left Behind.

By Larry Copeland, USA TODAY

Homeowners in many metropolitan areas are bracing for another round of higher tax bills as a hot real estate market and other factors push property taxes to new levels.


State and local property taxes in the first nine months of 2004 totaled $204.5 billion, up 7.9% from the same period in 2003 and 30% since 2000, the Census Bureau says. The trend is expected to continue this year.


In reaction, property owners in at least eight states are urging legislators to limit increases in property taxes, which finance everything from police and fire services to parks and schools.


But a widespread tax revolt appears unlikely this year. "People are grumbling ... (but) except in a few spots, there isn't a lot of movement to control property taxes," says David Brunori, contributing editor of State Tax Notes magazine.

http://story.news.yahoo.com/news?tmpl=story&cid=676&e=1&u=/usatoday/20050125/ts_usatoday/homeownerscanexpectbiggerpropertytaxbite

[EVDebs]

1. If you look at coastal overpopulated areas -- blue areas-- state local

taxes pegged to property values are skyrocketing. That's why CA revolted in 1978 with Prop 13 and capped taxes to that year with only 2% increases in valuation thereafter. Plus now families can do parent to child transfers and keep the reassessments that normally take place upon sales from happening.

Dems would be smart to set some kind of Revenue Sharing program with all these unfunded federal mandates (schools, ADA, Clean air, Clean water acts, etc.) just like Nixon had. If they don't do something fast, the Repubs will seize upon this and we'll be in even worse fiscal trouble than we already are.

DoD can't find missing $2.3 TRILLION (see CBS News "War on Waste" from http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

And your schools are having bake sales to keep up !

[davsand]

2. If you "cap" property taxes you hurt schools and local government.

As they point out in that article, schools get killed by mandates that carry no mechanism for funding. If the Federal or State governments are not giving what they need to you have local taxes that have to pick up the burden of funding it.

People WANT good schools, they don't want high local taxes however. The real control is to stop electing idjits (from EITHER party) who vote for laws they don't understand and mandates that carry no mechanism for funding. An even bigger problem with that, however, is taxpayers who don't have a clue what impact bills will have and support them blindly.

To cite ONE example, here in Illinois the Governor signed a new bill into law that increases the amount of the Home Owners' Exemption (meaning you own the property you reside in.) That bill enjoyed a lot of support even tho it reduces the amount schools have to tax--and thus it actually increases the amount they levy in order to keep the doors open.

People are paying MORE taxes on specific types of property as a result of that bill--in spite of the increased exemptions.

We get the services from our government that we deserve. If we elect idiots and shysters THIS is what we live with.


Laura

[ultraist]

5. Unequal distribution of taxes per school district

This should STOP. They should spread out the tax money equally amongst all school districts within a county and not give wealthier school districts more money. It's absurd that schools in poorer neighborhoods, those that pay less in property taxes, get less money. Everyone pays the same rate within the county, the tax money should be distributed equally amongst all schools within that county.

[MissB]

7. It is done here but there are ways around it

The parents in the wealthier district set up a private foundation. The foundation requests thousands of dollars for each student each year. That money goes to pay for things that the state no longer funds- like lower class sizes, full-time music teachers, librarians, foreign language teachers, etc.

[sendero]

8. Well..

... maybe you are familiar with the "robin hood" school funding method that Texas used to solve an "uncontitutional" inequality of school funding several years ago.

School funding in Texas is done through property taxation. In poor school districts, it was impossible to provide a decent infrastructure for education. The "robin hood" plan took money from the richer districts and divided it among the poorer. I didn't like it much, but then I felt like there was no better answer.

A judge last year decided that "robin hood" was itself unconstitutional (richer school districts have fought it tooth and nail since its inception) so now the state is basically in a funding crisis, nobody knows how schools will be funded but as usual it looks like more taxes are coming.

Even though I live in a "rich" school district, I felt like, all things considered, "robin hood" was as good a plan as we would ever have. I guess I'll find out soon.

[davsand]

9. I have no idea how your state property tax laws work.

Here in Illinois, tax rates are set by the amount the schools (and other taxing bodies) levy. In other words, school district A says they need 5 million to keep the doors open and the kids educated. They submit that amount to the County Clerk. The County Clerk (who has the job of figuring your tax bill) figures out how to distribute that requested amount across the taxing value of that district.

Please note: EACH district sets their own levy. They use formulas and calculations to do it, but any way you slice it, the schools themselves are setting up the budget--not the property tax assessor.

I agree that it is awful that there is an inequity when specific districts are poor, however, there is more to it than just a blanket solution like distributing it across the boards. (At least in Illinois, anyhow.)

In Illinois your property tax is an Ad Valorum tax (meaning it as literally "at value".) Our property tax laws mandate that all real property (meaning real estate and the buildings on it) is to be valued at one third of estimated market value. IF property sales numbers are inflated like they are now, you will see higher all around property values and, thus, higher property tax amounts with lower tax rates.

Inner city or depressed areas (plant closures or economic downturns) can starve for funding while areas viewed by the real estate market as "desirable" can have huge surpluses.

To be honest, the only solution I see to the entire mess,is to remove school funding from the property tax stream. Take the funding for schools our of an income tax and distribute to each district based on a formula that takes into account the number of students along with the amount the district spends to pay for educated teachers and transport kids to and from school.

However, Illinois has a big issue with Chicago -v- the rest of the state. No way downstate will trust Chicago not to screw their schools and no way will Chicago ever get enough to fund their schools (with horrible infrastructure problems, I might add. They are in DIRE need of new buildings.)

I wish there WAS an easy fix. I really do.


Laura

[EVDebs]

15. Unfunded school spending mandates for disabled children, etc. etc

which can vary from year to year are causing much fiscal trouble here in CA. The feds need to start payasyougo funding assistance / revenue sharing (as with the Nixon years).

We could also do without any more foreign adventures in the DoD, who cannot account for $2.3 TRILLION DOLLARS (see CBS News "War on Waste"
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml ).

The next time I hear neocons go off on wasteful spending in welfare and schools I'm going to mention this...

[EVDebs]

12. Then a progressive Natonal Income Tax scheme dedicated to state/local

needs ought to be mandated to PAY AS YOU GO for these necessary federal programs. Sales taxes and other gimmicks are being pushed out to the public as you are probably already aware, but the country essentially is under a de facto "flat tax" already (see Chs 7 and 8 of "Perfectly Legal" by David Cay Johnston). These are all forms of REGRESSIVE taxation.

We cannot continue to pamper the wealthiest few taxpayers/corporations and hammer Joe Sixpack. It won't work that way much longer !

[AP]

3. Use progressive state income tax to get money for counties and cities

and stop giving corporations huge property tax breaks.

Incidentally, one of the ways the property tax burden has been shifted off wealthy corporations and individuals and on to the middle class is the mechanism in Prop 13 for valuing property.

Your property's valuation is determined by the sale price. Some place constantly reassess property values so that every pays a tax based on the current value of their property. But not in CA.

So who buy's a new home frequently (or who is more likely to have recently purchased a home)? A young, middle class person.

Wealthy people tend to have large homes they keep for years, and then they pass them on in their wills which doesn't trigger a new valuation.

Corporations don't every sell their property. They lease it or they form a new corporate entity and merge assets.

The net effect is that people at the lower end of the income scale pay a much larger % of their income on property taxes, while people at the top end pay a tiny % of their income on property tax. It's very regressive.

[ultraist]

4. It works differently in my county in NC

Tax value is not based on sales in my county. They reevaluate property taxes every couple of years regardless of sales. The tax value is always lower than the market value.

The biggest property owners (large corps) pay the bulk of the property taxes. Landlords are next in line. If you look at our tax records which are public info online, the power and gas companies (as well as the other big corps) pay the most in prop taxes and landlords are the second biggest. Generally, big corps own their buildings but some companies do have a real estate developer/investors build and maintain ownership of the property (that's pretty old school though).

I do think some system should be in place though to protect lower income homeowners. For instance, any home valued at or under the median value (which I believe is approx $200,000 nationally) should pay a lower rate than properties over that value. Homestead exemptions are already in place which also helps.

[EVDebs]

13. Yes AP, I live in CA and was amazed that Gov Ahrnold's advisor

Warren Buffett would be criticized for advocating changes to Prop 13, but the commercial aspects have been with us for some time. Buffett also calls for raising corporate taxes nationwide (see Commondreams article at

"Warren Buffett Urges Higher Corporate Taxes "
http://www.commondreams.org/headlines04/0306-01.htm

and this on wealth concentration in US: http://www.osjspm.org/101_wealth.htm#3

Congress and the states can't keep trying to get blood from turnips, the money is going to corporations (who outsource jobs and get taxbreaks to do it) and the wealthiest few, who's comsumption power (marginal propensity to consume in economic language) doesn't come close to the 98 1/2 % of taxpayers who could really have jump-started this stalled economy. The wealthiest few's consumption, as you can see from the economic numbers, isn't revving up the economy !

[jjtss]

6. No action yet

"But a widespread tax revolt appears unlikely this year. "People are grumbling ... (but) except in a few spots, there isn't a lot of movement to control property taxes," says David Brunori, contributing editor of State Tax Notes magazine."
The movement starts when the property owners get their tax bills.

[louis c]

10. A Large Portion of The Property Tax Burden

is as a result of increasing health insurance costs.

Years ago, when health insurance was far less of a burden, Civil Servants were were paid in benefits, including health insurance.

As health insurance premiums have skyrocketed, the city, town, or district's portion has shot up with it. This cost is uncontrolled, and must be paid, not only to those firefighters, police officers, school teachers, public works employees, secretaries,librarians, custodians, etc., but to all those contractually entitled retirees of those departments.

Because President Asshole and his morons in congress continue to ignore this out of control crisis throughout our society, it has affects at almost every juncture you examine, including property taxes.

[EVDebs]

14. and corporations are dropping pension and healthcare benefits so fast

it is making heads spin. See Businessweek's article "The Benefits Trap" from July 2004. It comes out and says that globalizing corporations are using the excuse of 'competing' with foreign corporations who don't have to pay pension and health benefits in low-wage labor markets...

Competing with ... themselves !

[OneBlueSky]

11. my property taxes are going up almost 50% this year . . .

the town is increasing 35% due to fiscal mismanagement of the Republican administration (which our astute townspeople voted back into office AFTER the town supervisor was convicted of fraud and sentenced to prison), school taxes are going up about 7%, and county taxes about 4% . . . but, hey . . . I got my Bush tax cut . . .