Is it time to cap property taxes?
No one looks forward to their property tax bill. You’d think, though, that as the value of your home goes down — as it has for many, many homeowners during the real estate slump — that your property tax bill would do the same.
Unfortunately, that doesn’t always happen. It seems governments, which rely largely on property taxes to fund their operations, aren’t quite so willing to let suffering homeowners at least enjoy lower tax bills on their homes. Just another example of government making life harder for the people it supposed to serve.
There is a growing movement, though, for property-tax caps. Jennifer Levitz, a reporter for the Wall Street Journal, documents this trend in a recent story. According to this feature, legislatures in New York, Georgia, Oklahoma and Wyoming are all considering in their 2009 sessions proposals that would curb property taxes. In Indiana, a state I once called home, by the way, the legislature enacted a cap on property taxes last year. That cap became effective starting Jan. 1 of this year.
This seems to be only the beginning of this movement. The Wall Street Journal story points to citizen groups in Montana, Arizona and Nevada that are trying to get property-tax relief measures on their state’s ballots. In Florida last year, voters approved an amendment to the state constitution that increases the number of property-tax exemptions available to homeowners.
One of the problems is that cities and towns often rely on house sales that are a year or more older when they are figuring new property tax rates. This means that when housing prices fall, property tax rates are not necessarily based on homes’ new, lower values. For instance, the Wall Street Journal story cites New York City, which increased property taxes by 7 percent, an increase that took effect on Jan. 1.
Municipal officials quoted in the story say that they have little choice but to raise property taxes. They are already getting lower amounts of revenue because of the weak economy, they say, and have to supplement their budgets somehow.
To me, this defense is ridiculous. During the housing boom, governments never hesitated in hiking property taxes. The reason? Home values are going up, so tax rates have to reflect that. But now that housing prices are going down, we don’t see the same logic. When property taxes should be falling, they’re rising again.
It’s little reason that so many citizens despise government and politicians. It seems that when times are tough, as they are now, that government officials would take extra care to ease the financial burden they’re placing on their constituents. Instead, they’re simply squeezing them a bit more.
