NCPA - National Center for Policy Analysis

HOMEOWNERS REBELLION

May 1, 2007

The great American tax revolt is brewing again, not inside the Washington Beltway, but in cities and states across the country.  Minnesota, Michigan, New Jersey, Connecticut, Arizona, Virginia, Florida -- all have voters trembling with agitation against high and rising levels of taxation, says the Wall Street Journal.

Consider:

  • In normally placid Princeton, New Jersey, voters recently rejected a tax levy for schools for the first time in 16 years.
  • For homes valued at $400,000 -- which aren't the domiciles of the rich -- property taxes have skyrocketed to nearly $14,000 annually.

Ground zero for the tax rebellion is undoubtedly Florida.  On April 17 hundreds of taxpayer activists, homeowners, real-estate agents and homebuilders marched on Tallahassee chanting "Cut Taxes Now."  Here, too, the issue is property-tax assessments. Florida's property-tax collections rose 50 percent statewide between 2003 and 2006, a windfall from the red-hot housing market.

Thanks to the resulting revenue gusher, local government spending doubled between 2000 and 2006.  But now property owners are facing a double whammy: falling housing values and rising property taxes.  "Floridians today are crying out for property-tax relief," says Donna Arduin, the former state budget director and an architect of one of the tax cap proposals.

Florida's experience with sagging housing markets and state spending is hardly unique:

  • In Lake Tahoe, California, property taxes rose 135 percent in four years.
  • In Arizona taxpayer groups are gathering signatures for a mandatory property-tax rollback voter initiative to be placed on the November 2008 ballot.
  • In Northern Virginia, boom times in real estate coincided with double-digit percentage increases in the county budgets of Arlington and Fairfax every year from 2003 through 2006, even as tax rates were cut slightly.

Source: Editorial, "Homeowners Rebellion," Wall Street Journal, May 1, 2007.

For text:

http://online.wsj.com/article/SB117798635962387741.html

 

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