STICKING IT TO THE HOMEOWNERS
January 28, 2005
Cities and suburbs are facing budget shortfalls while demand for local services are increasing, leaving homeowners to foot the bill in the form of higher property taxes, say observers.
Many localities are trying to keep property taxes stable, but state funding cuts have prompted many to reassess home values yearly. Indeed, higher assessment values due to a booming housing market means that cities receive more tax revenues without having to raise tax rates:
- Property taxes totaled $204.5 billion in 2004, a 7.9 percent increase from 2003 and a 30 percent increase from 2000.
- Average property taxes on a 2,200-square foot home rose 21 percent over four years.
- Danville, a suburb of San Francisco, experienced the highest property tax hike since 2000, at 57 percent.
However, homeowners aren't happy about the increases, and local officials must find a balance between keeping property taxes stable and funding city services such as police and fire. Consequently, some states are looking at other means to produce revenue:
- New Jersey, with some of the nation's highest average property taxes, is considering raising income or sales taxes.
- Texas is considering reducing property taxes by up to one-third and replacing them with new business taxes and higher taxes on cigarettes, alcohol and cars.
Source: Larry Copeland, "Homeowners Can Expect Bigger Property Tax Bite," USA Today, January 25, 2005.
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