Faced with revolts by homeowners, legislatures from Maine to Nevada are coming up with possible fixes.
During the day, Tracy Price pilots Boeing 737s through the skies. But when he's not in the cockpit, one of his real passions is trying to get the property taxes lowered on his colonial in Fairfax Station, Va.
"The increase in my property taxes over the past seven years is enough money to pay for college for both my sons," says Mr. Price, who is a member of VOTORS, a grass-roots group pushing for a property-tax cap.
Across the country, homeowners are waging revolts as property taxes post massive gains. Faced with these protests, legislatures are considering ways to provide relief:
• Besides implementing a two-year cap on property taxes, Nevada is studying a constitutional amendment that would change the way property taxes are figured.
• Maine is picking up a larger share of education costs, which may lower property taxes.
• Voters in New Jersey are trying to force a constitutional convention that would reform property taxes. The State House has to authorize the convention.
"Almost every state is looking at some form of property-tax cap," says Myron Orfield, an expert on property taxes and a law professor at the University of Minnesota in Minneapolis. "It's a 'perfect storm' for property taxes: There are rapidly increasing home values while states are not keeping up with their contributions to school districts."
The talk of a real estate bubble is causing additional angst because many homeowners are afraid that their taxes may be based on a market value that no longer exists. "If northern Virginia is any guide, when it does burst, no local government is going to trim spending. They didn't when the value of their housing stock dipped in late 1989 and 1990," says William Ahern, a spokesman for the Tax Foundation in Washington.
Some are particularly concerned about the impact of rising home values on the elderly and those living on fixed incomes. Michigan, for example, this year increased the eligibility for a tax-deferral program on the basis of income. "They are expanding homestead exemptions that may or may not be based on age," says Bert Waisanen, a fiscal analyst at the National Conference of State Legislatures in Denver.