“Property Tax Revenues Falling” plus 2 more |
- Property Tax Revenues Falling
- Debate over City property tax begins
- Property tax board to hear disputes, check for evasion
| Posted: 07 Mar 2011 02:54 PM PST Cities and counties struggled during the recession. The recovery may be even worse. Local governments are just starting to feel the full brunt of the real-estate bust. Sales tax revenues fell in step with consumer spending during the recession — and are bouncing back now. But cities rely heavily on property taxes. Those receipts held up during the recession because houses hadn't been reassessed at their lower values. Homeowners aiming to lower property tax bills have been marching to local government offices, appealing assessments on a case-by-case basis. But it can take at least two years and usually five for assessments to catch up to market values, according to a working paper by Federal Reserve staff. "Revenues generally rose slowly through the recession," said Donald Boyd, a senior fellow at the Rockefeller Institute of Government. "But in many counties in California and Florida, property tax revenues are now declining." National property tax revenues rose through Q3 2010, according to the Rockefeller Institute. Nevada, epicenter for housing's boom and bust, enjoyed higher property tax revenues well into last year, according to the Fed study. But property tax receipts have begun to roll over and will likely keep falling until well after real estate prices recover, which may still be a ways off. With foreclosures high and the homebuyer tax credits gone, home values fell 3.8% in the second half of 2010 and more than 30% from their July 2006 peak, according to the latest Case-Shiller home price index. Falling commercial real estate prices for rental apartments, industrial parks and shopping malls will also flow through to property tax revenues, Boyd says. Thirty-five states surveyed by the National Conference of State Legislatures face a combined $82 billion budget gap in the year beginning July 1, including California with $19 billion, Illinois ($15 billion), New Jersey ($10.5 billion), New York ($9 billion) and Texas ($7.4 billion). States Slashing Local Aid States aiming to fix tattered finances face the end of federal stimulus aid. In turn, states are slashing school aid to local governments. Cities and towns get 30% of revenues from state government, says a Congressional Budget Office study. Localities get 26% of revenues from property taxes, though it can be much more in some areas, the CBO says. Cities and counties face tough political choices, says Michael Pagano, dean of the University of Illinois' College of Urban Planning. "We're just seeing the beginning of the decline in property tax receipts; we'll be in a very different place two or three years from now," said Pagano, who co-authored a study for the National League of Cities. Some cities have acted to soften the blow by increasing property tax rates. But hikes won't go over well with struggling homeowners, and California and some other states already have property tax limitations. Wisconsin Gov. Scott Walker has proposed a similar measure. Voters also won't like local governments that drag their heels on assessments. Other options for local governments are to cut government services, lay off employees or press public employee unions for pension givebacks and other concessions. Underfunded pension plans and retiree health care obligations will be a major drain for cities and countries, potentially leading to many bankruptcies in the coming years. Walker and several other GOP governors are in high-profile battles with government unions. But Democratic governors and mayors are quietly taking on Big Labor too. "Conditions are ripe for cities to renegotiate their social contracts — about the kinds of services provided and about who subsidizes whom," Pagano said. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Debate over City property tax begins Posted: 07 Mar 2011 06:39 PM PST BALTIMORE - Should Baltimore City move to drastically cut its property tax rate? Right now, a property owner in the City pays about twice as much as the owner of a similarly-priced home in Baltimore County. On Monday, Councilman Carl Stokes (D-12th) proposed legislation that would cut the City's tax rate by 15 cents per year for four years, eventually settling on a rate of $1.10 per $100 of assessed value, the same as Baltimore County's rate by the year 2016. 'I'm asking that we all keep an open mind and that we debate this and we agree that tax relief of a dramatic form is deserved by the property owners of Baltimore City,' Councilman Stokes said as he unveiled his plan Monday night. The Councilman believes that as the property tax rate is lowered, more people would move into Baltimore City -- eventually offsetting the loss of revenue. He said crime is dropping and City schools are improving, and now is the time to address property taxes. During the years that the formula would be phased in, Councilman Stokes is calling for several measures to increase revenue. Among those are temporary suspensions of new home credits, selling city-owned properties, and allowing the cap on the City's 'Homestead Tax Credit' to increase. About half of the homes in Baltimore City qualify for that credit, which limits the amount that the assessment for certain homes can be raised. Councilman Stokes' proposal would allow the assessments to temporarily increase to a higher rate, which would bring in more tax revenue. 'We know what will happen in the early years,' he said. 'I acknowledge that. But the fifth year going forward, every taxpayer in the City saves hundreds, and thousand of dollars off of their tax bill.' Councilman Stokes is expected to run for Mayor. The race would pit him against incumbent Mayor Stephanie Rawlings-Blake, along with what could be several other candidates in the September primary. Stokes rejected the argument that he is only proposing his plan because of the election, saying he's been calling for property tax reform for more than 15 years. But Mayor Rawlings-Blake blasted the plan -- a spokesman released the following statement Monday night: 'Despite two years of budget deficits equal to a 26% increase in the property tax rate, Mayor Rawlings-Blake has not and will not raise property taxes by one penny to fix the City's budget crisis. Instead, she is cutting nearly $150 million in City spending over two years, including a 10% cut to her own office while fully funding the police department and maintaining funding for schools to reduce crime and improve public education. Mayor Rawlings-Blake believes Baltimore deserves serious, fiscally-responsible solutions to manage the current fiscal situation and reduce Baltimore's property tax rate in the future. Unfortunately, this plan relies on fuzzy math, ignores the city's current fiscal problems, and would lead to irresponsible cuts in public safety and other core services while significantly raising taxes on existing City homeowners by virtually eliminating the homestead tax credit.' The plan also appears to lack support among members of City Council -- none of the other 14 members signed on as co-sponsers after Councilman Stokes proposed the legislation. 'What this bill does is increase property taxes on a significant portion of the City of Baltimore -- the people who have lived here the longest, who have stuck it out the longest,' said Councilman William Cole, (D-11th). But Councilman Stokes says the decline in the property tax rate will, in most cases, offset the raising of the Homestead Tax Credit cap. 'There will be a number of homeowners in the first couple years would notice a bit of a bump up,' he said. 'But by the fourth and fifth year, almost everyone gets a decline in their overall tax bill.' Copyright 2011 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Property tax board to hear disputes, check for evasion Posted: 08 Mar 2011 11:19 AM PST MUMBAI: Waking up to the massive loss of revenue on account of property tax evasion and to reduce the litigations filed against individual tax levy, the state government has decided to set up an independent property tax board to settle disputes and suggest corrective reforms. A proposal to set up the Maharashtra Municipal Tax Board is expected to be put up before the state cabinet on Wednesday. Officials said the objective was to improve the property tax collection system, and suggest ways to introduce reforms in the tax computation and assessment system. The setting up of the board is a mandatory condition set by the 13{+t}{+h} Finance Commission for urban local bodies that apply for central grants. Officials said the board will headed by a chairman, who will be an officer of the rank of a retired high court judge, a former chief secretary or a secretary with the central government. The board could comprise a maximum five members, a source said. It will have powers to hear disputes regarding property tax levied by municipalities, which will be duty-bound to furnish details on properties and assessments carried out during the fiscal. The state administration hopes there will be uniformity and transparency in assessment across urban local bodies using the board's services. Disputes over property tax levied on individual properties could also be submitted before the board. The board will also be empowered to notify an urban local body that is found lacking in performance. Officials said after cabinet approval, legislation will be introduced in the state assembly. The government plans to operationalize the reform in the next fiscal. The cabinet is also expected to discuss a proposal for extension of time to implement the switchover from the rateable value model of computing property tax to the capital value model. It has been necessitated as the Brihanmumbai Municipal Corporation (BMC) is unlikely to effect the switchover by the March 31 deadline. The government may permit the corporation to continue levying provisional bills till then. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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