Home prices fall, but local property taxes rise, Census says(Read article summary)
Local property tax revenues are up 3.6 percent, according to new census data, despite a 30 percent decline in home prices.
If you own a home, chances are its value has plunged in the last couple of years. How about your property taxes?
In the teeth of the worst real estate downturn since the 1930s, have your taxes stayed the same? Have they gone up?
If so, join the crowd. Nationwide, housing prices have fallen nearly 30 percent from their 2006 peak, according to the S&P 500/Case-Shiller 20-city index. But property tax revenues went up in the third quarter of this year,– an average 3.6 percent nationwide compared with the same period a year ago, according to Census data released Tuesday (.pdf).
That's fertile soil for the seeds of a tax revolt. If antitax activists, or perhaps the "tea parties" of the political right, began to focus on local taxes, the effects could put municipalities in a difficult bind. Already strapped for cash, they may well be forced to raise the property tax at a time when voters expect them to cut it.
"Very likely there will be further property-tax increases that many voters will find highly objectionable," says Robert Ward, deputy director of the Rockefeller Institute of Government in Albany, N.Y.
Cities are always slow to reassess the value of property. Assessments don't rise as fast when the market is going up and they are especially resistant to declines when the market is going down, says Robert Tannenwald, a vice president of the Federal Reserve Bank of Boston. Historically, the lag has been three to five years. But "we're entering uncharted territory here."