Falling home values mean budget crunches for cities

Washington Post ^ | Brady Dennis

[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 don’t 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. It’s creating gaps in our budget.”

Communities generally see a lag before property taxes reflect the true value of a home. That’s good news for homeowners during boom times, when their tax bills don’t immediately reflect skyrocketing values. It’s not so great during the bust of recent years, when many homeowners protest that their taxes haven’t 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.

[kearnyirish2]

“Many Pennsylvania Counties (assessments are done by County government) have voted to delay countywide reassessment indefinitely.”

In my neck of the woods in NJ they had revaluations a few years ago, not so much to increase taxes as to root out the illegal apartments where all of our “guest workers” were living. They didn’t even want to remove the illegal apartments; they wanted the American property owners to pay pay taxes as 2- or 3-family homes rather than the 1-family units they were built and taxed as. Nobody cared until the children of the “guest workers” (remember that name for them, when we pretended they were temporary?) showed up in the public schools. Towns that are officially 80% “white” have student bodies that are 50% Hispanic.

[Venturer]

Exactly, the old double dip.

These people in Congress who want to sock it to us on tax’s forget that States and County are already hosing us down.

They lower our tax’s by cutting payments to states, States cut tax’s by cutting the portion they return to County and County has to nail us to the cross.All the time taking highway funds and adding them to the General Fund and crying they cant fix the roads.

We are at the bottom of the tax food chain, and getting the shaft.