Local Taxes Escalating
December 23, 2002
As governors and legislatures in many states reluctantly conclude only tax hikes can rescue them from a sea of red ink, local officials are also at work driving up tax collections.
In the recent sluggish economy, sales tax collections are down in many localities. Tax experts point out localities must fund certain homeland security expenses, but the federal government has cut money to the states and the states have cut funds to cities. So homeowners are left on the hook.
- Homeowners are being hit with higher property tax collections -- which escalated an average of 10.4 percent nationally in the 12 months that ended June 30.
- Taxes in the first half of this fiscal year were up 14.1 percent compared to collections in the first six months of 2001.
- In the second quarter of this year alone, property taxes were up 24 percent compared with the same three months of 2001.
- Experts predict a property-tax rebellion in New Jersey -- which in 1999 had the highest tax per capita of any state in the nation.
Property taxes supply 72 percent of local tax revenues, according to the National Conference of State Legislatures. Soaring home values are blamed for much of the increase.
Source: Patrick McMahon, "Climbing Taxes Hit Property Owners," USA Today, December 23, 2002.
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