Property tax revolt?
As the economy continues to decline, many citizens are patiently waiting for solutions from government, and are looking for the new administration to get started “fixing things.” What happens if there is no improvement soon? Individuals will eventually lose their patience and take action.
The first area of confrontation may be property taxes.
Property taxes are one of the few government revenue sources controlled at the local level. Taxes are collected at the city or county level in most cases. Some of the tax may be “kicked up” to the state, but it is generally a locally controlled payment. Because of this, taking action against property tax amounts is easier for homeowners, because their “adversary” is more accessible. Calling or visiting the county commissioner, or tax assessor is easier than traveling to Washington D.C to object to and Federal Tax. Plus, local government officials are more vulnerable to election pressure, as it takes less people against a particular candidate to vote them out.
The total annual tax amount is apparent to the taxpayer. Many property owners pay their tax bill directly, and confront the entire tax amount as a lump sum when they write the check. Property owners whose tax bill is paid throgh escrow by their mortgage lender receive the annual tax bill, and are aware of the amount. For this reason, the property tax is more of an “in-your-face” expense than payroll taxes. Citizens develop a numbness to payroll taxes after years of getting used to their net check amount. Most employees do not make themselves aware of the year-end total that was deducted from them for employment taxes.
Property taxes do not decrease directly with the harsh property value declines. Homeowners are acutely aware of the sharp crash in property values, but do not see a significant reduction on property tax amounts. In some cases, their tax bill even goes up. Property tax assessments often run a few years behind on adjusting assessments. In addition, municipalities are scrambling to keep their revenues up to maintain their budgets. Mill rate adjustments and new line items are added in, offsetting some of the reductions to assessed amounts.
This puts property taxes directly in the crossfire of contention between financially squeezed citizens, and government. As the economy continues to decline, this may become a more serious clash between the parties. Florida lawmakers are already feeling the pressure, and have begun proposing and passing laws to try and relieve some of the strain on constituents. Some Nevada homeonwers have had success in getting their property assessments reduced.
No matter how high your property taxes are, you can take comfort in not having to write a check every year for over $1,000,000, as this homeowner in Palm Beach does.
