Local Government and their Lust For Property Taxes : The Real Estate Bloggers

Local Government and their Lust For Property Taxes

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CashCowThe lust of government for your money is a known fact. They tax our income, our savings, our property, and our death. Nothing is sacred to these folks as long as they get their money. But one of the biggest cash cows for local governments has been the property tax. This allows the local governments to give generous salaries and exorbitant benefits to our public servants based upon increasing property values.

If there is not enough leeway to raise the taxes then all you have to do is reassess property values and the money will flow in. For example the home I live in has seen the taxes go up from $2,800 in 2001 when we bought the home to $4,600 when they are due on the 15th of this month. (Yes, I know, I am not in an unbiased and generous mood as I write this post anticipating writing the property tax check this week.)

Here is columnist Stephen Henderson’s analysis of what is happening in Detroit these days.

Let’s just put it this way: The yearly growth in government costs (from increases in school funding to expansion in retiree health care costs to negotiated raises for employees) has historically been covered by the inflationary real estate market yielding more tax revenue. Just a few years ago, growth of two or three times the rate of inflation was nothing.
But wipe that out, as has apparently happened in Oakland County, and all of a sudden the ledger doesn’t add up anymore. Costs keep growing but government revenue stays flat, or even declines. Detroit Free Press

But with the property value downturn the government will not be able to raise the assessment to pay for their cousin to pick up a nice check and a nicer pension. Detroit is facing this scenario and they are loaded with unbudging unions. Parts of Phoenix, South Florida, and large swaths of California are facing shrinking property values.

I am sure that the assessors will not be lowering the property values as quickly as they raised them over the past five years of large increases. The projects and pork must be funded. But it is the right of every taxpayer to challenge their assessments and potentially lower their property tax.

So I strongly recommend when the local tax bills in your county come out, look them over correctly. And if the valuations are out of whack, make sure you appeal with your local tax office. Because I hate to say this, but I truly believe that the largest purveyor of tax fraud in the next couple of years will be the county assessors office and your local governments as they try to maintain their status quo on the back of your falling property values.

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There Are 3 Responses So Far. »

  1. […] ← Local Government and their Lust For Property Taxes […]

  2. […] Thanks for visiting!Real estate assessments - high and low - bring about emotional responses. Local government, and government in general, have an insatiable need for our money. Sometimes, as in this case, the responses are from the public officials charged with assessing […]

  3. […] we have talked about previously, state governments did not have any restraint during the big money years of the housing boom. Instead of socking some of the money away for a rainy day, they created new […]

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